AI’s Role in Reshaping Financial Firms and Workflows

Imagine a Wall Street banker leveraging AI, and you might picture an analyst speeding up tasks like building pitch decks, models, and memos. Kevin Buehler foresees a broader transformation where AI impacts the structure of financial firms. As AI tools become integral to financial workflows, they could redefine who performs the work, how senior employees engage with it, and where human judgment remains crucial. During a recent “AI Impact Forum” webinar titled “AI in Finance: From Individual Adoption to Enterprise Transformation,” Buehler, chief innovation officer at Rogo and a former senior partner at McKinsey & Company, highlighted the shift from individual productivity to broader organizational change.

Dr. Ranjit Tinaikar, the series host, introduced Rogo, an AI company specializing in financial institutions, as part of a new breed of AI-native companies merging software and services. Felix, Rogo’s workflow tool for financial services, exemplifies how these tools affect bankers, investors, and regulated institutions. Buehler explained that Felix manages tasks traditionally handled by junior bankers, such as preparing pitch materials and spreadsheets and analyzing companies, scenarios, and potential acquisitions. The key question is how firms utilize the newly unlocked capacity.

“I think this elevates the work that folks can do,” Buehler said. Banks might use productivity gains to cut down late-night hours or reinvest them into client interactions and activities requiring more judgment. Such decisions could reshape organizations historically built on layers of junior labor.

“Right now, most firms look like pyramids because that’s what’s needed to get the work done,” Buehler noted. “We think we’ll see a shift towards skyscrapers.”

In this skyscraper model, senior managing directors or partners remain at the top. Below them are AI-proficient professionals managing complex workflows with automated systems’ support. At the base is a team of agents, each specializing in different domain tasks.

This structural change prompts questions about jobs. AI might reduce manual work once essential for large analyst classes, but Buehler views it not as a simple replacement narrative. Firms will choose whether the saved time leads to cost reduction, enhanced client service, training, or new tasks. He cited DBS, a Singapore bank, as an example. Through enhanced technology, data, and AI capabilities, DBS retrained and redeployed staff to explore new client markets, resulting in growth rather than just cost-cutting.

Buehler acknowledged that this transition may be uneven. Adoption within firms could vary, with senior executives discussing new tools while junior staff members are the first to use them. This pattern is common in technology rollouts. Buehler observed the same with AI tools, where junior employees often adopt them before seniors.

Design may change this trend, as shown by Rogo’s experience. Senior users might more readily embrace AI when it aligns with their current workflow. Buehler illustrated using Felix via phone or email, requesting analyses, and iterating with it like a team.

Transition becomes more complicated post initial adoption. While starting with junior employees is easier, integrating AI fundamentally into workflows, like an end-to-end M&A process, is more challenging than merely speeding up tasks.

In a sale process, AI might help collect documents, build financial models, prepare confidential information memorandums, establish a virtual data room, assist in due diligence, and handle bidding. The challenge lies in ensuring security, compliance, and accountability remain intact.

In finance, AI cannot act for firms without human oversight. Buehler explained Rogo documents include sources for every number, whether from public filings, market data, or internal files, ensuring comprehensive validation and judgment beyond mere data collection.

Governance extends beyond individual documents. AI raises security standards, he pointed out. Rogo employs stringent data retention policies, continuous penetration testing, and a security advisory board. Additionally, banks conduct their own tests on new models and features.

Rogo’s approach keeps the company closely involved, combining the Felix platform with forward-deployed experts assisting financial clients in integrating AI into specialized workflows. This could challenge older models where vendors stayed narrowly focused.

Buehler emphasized focus as a lesson for companies in regulated domains. They cannot afford to be generalists but must delve deeply into market specifics to comprehend clients as thoroughly as they do themselves.

AI can reduce the time needed for producing decks or analyzing companies, but the true test is whether financial firms redesign workflows and prepare people for judgment-heavy roles while ensuring oversight is maintained.

“Banks demand that you have a human who’s ultimately responsible,” noted Buehler. “Nothing goes directly to the bank’s clients without oversight.”

To watch the full discussion between Tinaikar and Buehler, access the video above. Upcoming sessions include “Is India on the Right Side of the AI Trade?” exploring India’s economic potential from its technology services and capital markets to financial infrastructure and investor protection. The event, featuring Ashishkumar Chauhan of the National Stock Exchange of India, occurs on Thursday, July 23, at 10 a.m. Eastern.