Article: Applying Generative AI Archetypes in Private Finance

Summary

Last month we explored how private finance professionals can leverage proprietary data to start building a corporate memory from the ground up using the latest technologies. This month, we shift our focus from corporate memory to exploring how Gen AI can transform the workflows of analysing new investment and M&A opportunities. In this post, we’ll outline the key opportunities Gen AI offers and discuss how you can transition from traditional screening, due diligence, and reporting methods to more innovative and faster approaches powered by the latest AI-driven technologies.

The Archetypes of Gen AI

Gen AI is making waves in a number of industries. Yet understanding the most impactful and sound use cases for private finance requires a clear-eyed approach, free from hype. Broadly speaking, there are four key archetypes of Gen AI use cases:

• Developer productivity tools: Enhancing coding efficiency and automation
• Content generation engines: Automating the creation of documents, presentations, and other materials
• Human engagement tools: Enriching employee experiences and streamlining interactions with chatbots and agents
• Virtual knowledge workers: Summarising and extracting insights from vast amounts of structured and unstructured data

For private finance professionals, the most relevant archetypes are content generation and virtual knowledge workers, while larger organisations may also find value in human engagement tools. In contrast, developer productivity tools are typically less applicable in the relationship-driven world of private finance.

A recent McKinsey’s Investment Industry Report outlined a useful analogy for understanding Gen AI’s current capabilities. According to the report, Gen AI is like your newest intern, enthusiastic and capable but not always correct. Its outputs often look impressive and can advance our thinking, but they require critical evaluation and human judgment. However, with humans in the loop, Gen AI can be a powerful tool for enhancing efficiency and decision making.

From a private finance perspective the analogy highlights where professionals can take advantage of Gen AI’s strengths while staying alert to its potential shortcomings. By recognising its capabilities as a fast virtual knowledge worker and a content generator, professionals can significantly reduce the time spent f.e. reading lengthy documents and creating concise summaries of them, or extracting data and performing other manual analysis, transforming tasks that once took hours into ones completed within minutes.

Getting Value from Day One

To start leveraging Gen AI effectively, we suggest your team to look for use cases in the following areas:

• Document summarisation: Using solutions that utilise LLMs to summarise due diligence reports, info packs, and benchmarking data, helping you to do the initial analysis in a matter of minutes

• Ability to extract insights from unstructured data: This can include data extraction from any sources, incl. unstructured data in PDFs, emails and notes giving a clear picture of the topic

• Automated presentations and memos: Purpose built models can automate presentation generation, reducing the time to build a 1-pager or other committee memos to a matter of minutes

Gen AI offers transformative potential for private finance, particularly in summarising data, generating insights, and automating content creation. While it currently functions like a driven but sometimes imperfect intern, its capabilities can drive significant efficiency when paired with human oversight. With the right purpose-built models, its capabilities could soon rival the skills of an analyst. By embracing the knowledge worker and content generation archetypes, private finance professionals can include Gen AI into their core workflows effectively.

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Author: Eljas Pajamies