FINRA Guidance on BDs and RIAs using AI in Customer Support

Let’s talk about AI and customer support—a hot topic in the financial services world. Brokers and Registered Investment Advisers (RIAs) are looking to leverage AI in order to make client interactions smoother, faster, and more personalized. But like any game-changer, it comes with responsibilities. That’s where FINRA (Financial Industry Regulatory Authority) steps in, offering guidance to ensure AI is used effectively and ethically without compromising investor protection.

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FINRA’s Take in a Nutshell

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FINRA’s advice is straightforward: Treat AI for customer support much as you treat your current customer support staff.  Train it well, supervise it, and review its interactions with clients regularly—just like you would with human customer support reps.

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How Brokers and RIAs Are Using AI

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Here’s a quick look at where AI is making waves:

• Chatbots and Virtual Assistants: These handy tools answer FAQs about the Brokers and RIA’s business and operations, the use of apps and websites, and some, like Ask Clio, can answer questions about a client's account information. 
• Personalized Touch: Ask Clio’s can actually dig into a client's data to offer answers to questions specific to that client's account; including funding, trades and almost anything specific to that account. 
• Staying Ahead of the Game: With predictive analytics, AI helps firms anticipate client needs and solve issues before they become problems.  
• Leveraging AI for internal use: Once a Broker or RIA has “plugged” an AI platform like Ask Clio into their back office, they have a powerful new tool for Business Intelligence. 

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FINRA’s Watchlist: What to Keep in Mind

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FINRA has published a number of reports and bulletins regarding AI over the past few years.  They include tips to keep your AI game strong and compliant:

1. Risk Management: Make sure your AI tools are reliable and explainable. Know where your data comes from, keep it clean, and make sure the answers it gives are compliant. 
2. Data Governance: Your AI is only as good as the data it feeds on. Check that your data is accurate, current, and bias-free.
3. Privacy First: Client data is sacred. Follow all the privacy laws and take extra steps to keep sensitive info safe.
4. Supervision Is Key: Regularly review and update your AI systems to ensure compliance and performance, while leveraging connections to vendors like Global Relay and Smarsh 

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The Risks You Can’t Ignore

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AI is exciting, but it’s not perfect. FINRA flags a few risks to watch out for:

• Bias in the System: AI can reflect the biases in its training data. Take proactive steps to spot and fix this to ensure fair treatment for all clients.
• Transparency Issues: Clients deserve to know how AI-driven decisions are made. Keep your processes clear and provide explanations when needed.
• Accountability Matters: Even when AI handles tasks, the firm is still on the hook for any mistakes. Make sure accountability frameworks are in place to handle any hiccups.

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Wrapping It Up

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AI has huge potential to revolutionize customer support in financial services, and FINRA knows it. But it’s all about balance—leveraging tech to improve client experiences while staying compliant, ethical, and transparent. By following FINRA’s guidance, brokers and RIAs can confidently adopt AI and stay ahead in this fast-evolving landscape.

Bottom line: Use AI responsibly, and you’ll reap the rewards of happier clients and smoother operations—with fewer headaches.

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Disclaimer:

Brokerage AI Corp (DBA “Ask Clio”) is designed to support customer interactions and operations for broker-dealers (BDs) and registered investment advisers (RIAs). Firms are responsible for ensuring the product's use complies with all applicable regulatory requirements, including FINRA and SEC rules.

Proper supervision, data governance, and privacy safeguards must be implemented by each firm. Ask Clio does not provide legal or compliance advice and is not liable for improper use or regulatory non-compliance. Firms should consult their legal and compliance teams for specific guidance.

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