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April 4th, 2024

Is Your Investment Firm’s Conversational AI SEC-Compliant?

  • portrait of Kara Hartnett

    Kara Hartnett

The financial industry recently faced a wake-up call when the Securities and Exchange Commission (SEC) fined two investment advisers for falsely advertising their artificial intelligence (AI) capabilities. This development highlights a critical lesson for investment firms and the broader business community: using AI technologies that are innovative, reliable, and accurately represented.

This is a clear reminder for investment firms to implement AI assistants that perform well, fulfilling AI's potential without risking regulatory backlash or damaging trust. The SEC's action demonstrates the need for effective, compliant AI solutions in business operations, focusing on technology's promise without misleading stakeholders about its capabilities.

This blog will explore why investment firms must prioritize deploying functional and compliant AI solutions. We'll discuss how technology like Rasa's generative conversational AI platform enhances customer service and gives a stronger competitive advantage. Join us as we explore how your firm can remain compliant in a strictly regulated environment while providing the innovation clients crave.

Why is reliable conversational AI in investment firms so important?

Conversational AI transforms how investment firms interact with clients, focusing on efficiency, personalization, and seamless communication. This technology enables:

  • Enhancing client conversations that reduce wait time and make services more accessible.
  • Providing personalized advice and support by understanding client needs and preferences.

However, the rush to capitalize on conversational AI's potential can lead to overstatements about its capabilities, leading to significant challenges:

  • Firms that promise more than their AI can deliver risk damaging client trust and credibility.
  • Overpromising can also hinder stakeholder buy-in for genuinely transformative solutions.

For investment firms, it's critical to align conversational AI's capabilities with what's advertised, emphasizing:

  • Committing to transparency about the technology's capabilities and limitations to ensure clients' expectations are accurately set.
  • Making sure promises align with performance is key to maintaining a firm’s reputation and building client trust.

Integrating conversational AI in the investment industry requires a delicate balance between leveraging its advantages and maintaining integrity. This strategic approach preserves client trust and sets the stage for ongoing innovation and a competitive edge.

How can investment firms responsibly deploy AI?

Deploying AI responsibly in investment firms isn't just about staying ahead of the curve—it's about setting a standard for trust and reliability. Here's how firms can ensure their AI use complies with regulations and aligns with ethical guidelines and customer expectations:

Create transparent AI strategies: Start by being open about what your AI can and can't do. This means clear communication on how AI-driven recommendations are generated and the data sources used. For example, at Rasa, we believe it is most ethical to be transparent with your users and inform them when they are talking with an AI Assistant. Let your clients know what the AI assistant can and can’t do.

Prioritize data security and privacy: With AI, data is everything. Ensuring client data used to train and run your AI systems is securely handled is non-negotiable. Adopt best practices in data privacy, be clear about your data use policies, and strictly adhere to regulations like GDPR. With the Rasa Platform, we offer PII management approaches so you know your client’s data is protected.

Implement continuous learning and improvement: AI systems aren't set-it-and-forget-it solutions. They require ongoing monitoring to provide accurate, relevant advice. Incorporate feedback loops where client feedback and market changes inform regular AI updates. Within our user interface, Rasa Studio, you can track and filter live user conversations for deeper analysis to continuously improve your AI Assistant.

Diversify AI training data: Avoid bias by training your AI on a diverse dataset that accurately represents the varied client profiles and scenarios it will encounter. This improves the AI's relevance and accuracy and reinforces your commitment to fair, unbiased decision-making. Within our user interface, Rasa Studio, you can track and filter live user conversations for deeper analysis and improvement recommendations.

Educate your team and clients: Knowledge is power in AI. Ensure your team understands how AI tools work, their capabilities, and their limitations. Similarly, educating clients about AI can demystify the technology and enhance their comfort level with AI-driven services. Check out our YouTube channel or our learning center for deep-dive overviews of key AI concepts and get a jump start on your learning.

By embracing these strategies, investment firms can responsibly harness AI's power to enhance customer service, improve decision-making, and maintain a competitive edge while upholding the highest standards of integrity and trust.

How does Rasa provide trustworthy conversational AI?

Rasa provides trustworthy and transparent generative conversational AI. Our platform is not a black box; you retain full control over your data and security preferences. It is designed with compliance in mind and allows firms to leverage AI's full potential without compromising accuracy or safety.

Our platform goes beyond traditional AI assistants by using a cutting-edge approach that ensures more natural, dynamic interactions. This technology enables Rasa-powered AI assistants to understand and respond to a wide range of customer questions with precision, adapting to the context of each conversation.

Unlike conventional systems that rely heavily on predefined responses, Rasa’s AI assistants generate dynamic and engaging responses that tackle the critical issue of hallucination. With Rasa, users receive accurate information each time. This approach aligns with security and regulatory requirements, preventing misinformation and avoiding potential fines.

See our whitepaper on Navigating Compliance in Regulated Industries with CALM to learn more about the compliance capabilities of Rasa’s latest technology, CALM (Conversational AI with Language Models).

The future of AI in investment is on a fast track, with advancements and evolving regulations expected. Here’s what we predict:

  • AI will offer sharper market predictions and personalized investment advice using real-time data for dynamic portfolio management.
  • Expect tighter regulations on AI transparency and accountability, with firms possibly needing to disclose AI's role in investment decisions.
  • Regulators may set guidelines for fair AI decision-making, requiring firms to incorporate bias detection and correction.
  • Global collaboration could standardize AI standards worldwide with consistent approaches to AI deployment.
  • With a focus on personal data protection, investment firms will need advanced data security measures to meet regulatory demands.

Investment firms must adapt quickly, engage with regulators, and prioritize ethical AI use to maintain client confidentiality and trust.


As we conclude our discussion, the takeaway is undeniable: leveraging conversational AI responsibly and innovatively is critical for investment firms. Integrating Rasa’s generative conversational AI into the financial industry is a step toward more personalized, efficient, and trustworthy client interactions. We aim to empower firms with the tools they need to navigate financial regulations while delivering exceptional service.

Looking forward, the financial industry is enhancing decision-making capabilities and refining customer experiences while adhering to the evolving landscape of global regulations. Rasa is ready to help firms better connect with their customers with our commitment to security, compliance, and cutting-edge AI solutions.

Join us as we redefine what conversational AI can achieve in the financial sector. We’re working to build a future where technology and human expertise collaborate to unlock unprecedented value for clients and firms alike. Contact us today to learn more.