Dive Brief:

• Artificial intelligence is poised to save financial advisers in Morgan Stanley’s wealth business hours each week, CEO Ted Pick said Monday. 
• Although the investment banking side is set to benefit from the proliferation of AI as well, the technology is likely to be “even more” of a game changer for the bank’s wealth business, Pick said.
• One example he outlined: During meetings with wealth management clients, AI tools can transcribe conversations and categorize them by topic, saving the bank’s financial advisers 10 to 15 hours each week, Pick said Monday at a Morgan Stanley conference. “That’s an enormous productivity quantum, and that’s not even getting to anticipating what might be the right conversation to have,” he said.

Dive Insight:

Pick took over as CEO in January, replacing James Gorman. As Pick detailed his expectations Monday for how AI could change operations at the New York City-based bank’s investment banking and wealth management segments, he said the former is “going to be at the heart of a lot of this interesting development around AI.”

He envisions the broader AI opportunity creating “an enormous flywheel of activity” for Morgan Stanley’s investment banking business, pointing to the bank’s utilities clients who are buyers or suppliers of power and communications clients who are owners or lessors of towers, as well as AI companies themselves pursuing financing and initial public offerings.

Pick noted the importance of Morgan Stanley’s efforts to become a more integrated firm, because investment banking staff might be able to connect a large-scale tech company with those on the commodities side.

“That works at our place,” because there’s “a history of trust,” he said, adding, “That, over time, then starts bleeding into productivity.”

Pick emphasized that integration is a key element of his vision for Morgan Stanley.

“We’ve been unified for a long time,” he said. “You can’t just wake up one day and say ‘Let’s get along.’”

Morgan Stanley Co-President Dan Simkowitz will spearhead “the integrated investment bank continuity on steroids,” going after asset managers and asset owners with a holistic coverage mindset, Pick said.

Morgan Stanley’s size is a notable advantage when it comes to the cost benefits of technology use and improving efficiencies, Pick said. 

“You can afford to get ahead of cyber scenarios and bad actors and state-of-the-art surveilling,” he said. “And you can think about efficiencies associated with using AI to break down some of the classic infrastructure controls.” 

The bank’s CFO, Sharon Yeshaya, has begun working on the 2025 budget, Pick noted, and finance leaders are working with those on Morgan Stanley’s research team to consider how the efficiencies might work for the bank, he said.

“As long as there are high-quality eyes on top of the technology development, you can be in a cycle where you’re beginning to be able to process more [information] faster through the pipes, knowing that you’re going to have AI as something that will, over time, relieve some of the [operating expenses] pressure,” Pick said. 

Morgan Stanley in March named a firmwide AI chief, Jeff McMillan, who oversaw the development of AI @ Morgan Stanley Assistant, a virtual assistant for financial advisers and bankers powered by OpenAI.