For many fund shops, the conversations around leveraging artificial intelligence surround use cases such as streamlining operations and cutting costs.
For Catherine Bessant, chief operations and technology officer at Bank of America, artificial intelligence has positioned itself as a tool to help her firm better deliver on diverse recruiting.
“I would like to use AI to eliminate human bias in hiring,” Bessant said during a panel at the Securities Industry and Financial Markets Association conference in Boca Raton, Florida. “If you were really pinning me down to say one way that AI could change the world, it would be the elimination of human bias. It only happens if we believe that AI is a subset of human understanding, and if we understand how the algorithms we are writing have to change history, not repeat it.”
While advanced technology could help eliminate human bias, fund shops looking to leverage AI or machine learning for diversity recruiting must also be wary of the potential that the autonomous nature of the technology means any flaw in coding could trickle down and create huge negative impacts.
“It has to do with what are the questions we are asking,” Bessant said. “If I ask how to hire faster, the thing to do is take the models that have produced successful candidates to successful hires and make that as fast as possible. That’s a perpetuation of history. The question must be how to increase the diversity of my hiring. Sometimes we get the questions wrong.”
Bank of America isn’t the only fund shop looking to leverage technology to aid in its diversity recruiting strategy. Voya Investments is using a tool called Textio that helps wipe biased language from job posting criteria and from promotional criteria.
“Textio is a tool we signed up for, and implemented, last year. We’ve seen an 8% uptick in female candidates to our roles,” said Mike Pratt, head of human resources at Voya. “The one-year data looks very strong.”
TIAA, the parent company of Nuveen, is using big data and data analytics to better draw connections between diverse teams and productivity levels to quantify the benefits of a diverse staff.
“Are we seeing certain groups lead the organization in higher numbers, are we hiring in a way that reflects the relevant labor markets?” said Corie Pauling, SVP and chief diversity and inclusion officer at TIAA.
Recruiting – both for diverse candidates and in general – is a hot topic, and one that Marty Burns, chief industry operations officer at the Investment Company Institute, anticipates will be the number one concern for fund shops going forward.
“The leading issues facing fund groups for this coming year is staffing,” Burns said.
Bessant shared Burns’ sentiment, noting that the talent pool within asset management needs an influx of new faces to stop firms from stealing away candidates in an endless cycle.
“The war for talent is real, and there aren’t enough people at senior levels,” Bessant said. “When we hire people away, we are just rearranging deck chairs. The answer has to be to expand the pie, to continue to drive technology so our defense systems are not as dependent on human judgement as they are today.”
Speaking at the Investment Company Institute’s General Membership Meeting in Washington, D.C. last week, the CEOs of Invesco and Legg Mason both highlighted the need for fund complexes to bring in fresh perspectives from outside the industry and improve diversity in general, as part of a cultural transformation required for firms to embrace a world of constant evolution.
Click here to read our key takeaways from the ICI event and click here to access our ongoing series of articles looking at how leading fund groups are boosting their diversity and inclusion policies.
