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Quick: Can you spot the writing of a robot?
Exhibit A: “WYNN-US’s return on assets has declined from above median to about median among peers, indicating declining relative operating performance.”
Exhibit B: “Despite an upper single digit sales CAGR through 2025, limited margin leverage mutes earnings momentum. Intuitive has the highest high OM/GM ration in devices even following recent softer top-line growth pressuring operating margins through 2015.”
These were the two samples that Stephanie Yang presented in her Wall Street Journal article, Is Your Wall Street Analyst a Robot? If you guessed that a robot generated Exhibit A, you’re correct.
Yang explores the rising trend of financial-services businesses to rely on software for computer-generated news like this sample. In fact, she says automated writing has become so popular that financial firms make up 60% of the client base at Narrative Sciences Inc. Other startups that use artificial intelligence are clamoring to get in on the action.
So, what does trend this mean for financial advisors and investors?
Let’s start with the good news: Automation brings with it a world of efficiencies. Although Yang couldn’t get firms to talk cost, sophisticated software programs that use algorithms to synthesize information enable business to publish thousands of corporate summaries and marketing materials quickly and relatively cheaply. Analysts, in turn, are less preoccupied with reports and more free to focus on higher-value time with clients. And they apparently don’t need to be concerned about being replaced by a robot: Yang cited a 2013 Oxford University study in which financial analysts were ranked as safer than 70% of other occupations.
But automation comes with its problems: Just take a look at two writing samples again. Whereas the machine reported quantitative facts in Exhibit A, the human writer who composed Exhibit B weighed each word for quality. Yang points out the ability of a human to cut through industry noise to bring insight, advancement, and nuance to financial information. Every businessman worth his salt knows business is about relationships, and a human writer can build relationships with words that a machine cannot (yet).
Ultimately, even this writer has to admit that automation in writing is an interesting and worthwhile development. But as with any novel shortcut in business, recognize its limitations or risk alienating your investors. Only a human writer can truly leverage words to build business-sustaining relationships.
Ella Ritchie is the owner of Stellar Communications, a Houston-based editing and writing company that delivers quality content on time to business leaders, publishers, nonprofit organizations, and federal government agencies. Connect with her on LinkedIn or check out her website for more information.