The presentation focused on the power, benefits, challenges, and risks of generative AI, with emphasis on its use in the private sector and family offices. The discussions included general use cases of GenAI and its application, challenges of safeguarding data for family offices and individuals, and examples of how to protect FOs.

This is the fifth in a series of articles that also appears in a 24-page publication by Family Wealth Report: “Family Office Cybersecurity and AI Summit.” The following article is from John Boles and Danielle Valkner, at PricewaterhouseCoopers. (More on the authors below.)

Artificial Intelligence (AI) is a collection of advanced analytics and algorithms designed to inform decisions and take action to achieve a specific purpose. It encompasses machine learning, a subfield of AI that builds quantitative insights and predictions, and deep learning, a machine learning technique based on artificial neural networks in which multiple layers of processing are used to extract progressively higher level features from data. GenAI, a type of AI, uses large amounts of data and large pre-trained models to generate new content, such as text, code, images, videos and audio which is highly accessible to developers and end users.

GenAI has a variety of applications, including summarizing complex documents and agreements, searching for specific information within a document through Q&A, creating a transformed version of data, responding to a given question using chatbots, service bots, and virtual assistants, and creating net new content. 

Leading firms are combining GenAI and other AI tools to deliver the best business outcomes and help reduce risks. Some real-life practical use cases include organizational chatbot and inquiry management, deal sourcing research support and synthesis, automated document generation, market risk analytics, investment and performance report generation, variation analysis and commentary generation, contract review and ad hoc reporting.

With any new technology, particularly one as novel and complex as GenAI, unanticipated consequences introduce potential risks. Risks can include model risks, data risks, system and infrastructure risks, use risks, legal and compliance risks and process risks. Regardless of whether your family office pursues GenAI, others – including bad actors – will use the technology, so it’s important that your family office staff are prepared with training, responsible AI policies, and enhanced cybersecurity. 

To protect personal data and identity in today's environment, wealthy individuals are advised to educate themselves on AI/GPT and its uses, police their online presence, increase vigilance for scams/phishing/social engineering, double down on controls, and consider reducing their online footprint. Family offices should also consider establishing an acceptable use case policy and educating their employees. 

To double down on controls and help mitigate cyber risks, consider assessing all wire transfer/payment requests and changes in banking information, establishing and educating employees on GenAI use policies, and considering monitoring its usage. It's also crucial to educate users on AI tools, their capabilities, deficiencies, and risks and train helpdesk or call centers on social engineering risks. Lastly, enabling end-to-end encryption, considering managed service security provider support, and updating response plans are leading practices you can use for your family office. 

Key takeaways 
• Leading firms are combining GenAI and other machine learning patterns to deliver the best business outcomes and mitigate biases and risks. Use cases include organizational chatbots and inquiry management systems, deal sourcing research support and synthesis, automated document generation, market risk analytics, investment and performance report generation, variation analysis and commentary generation, contract review and key term processing, and ad hoc reporting.
• The use of GenAI also comes with several risks, including legal and compliance risks, process risks, model risks, data risks, system and infrastructure risks and use risks. 
• To mitigate these risks, individuals should consider establishing an acceptable use case policy for employees and providing proper education and training, doubling down on controls, increasing vigilance for scams and phishing and policing online presence. 
• Leading practices for controls can include assessing all wire transfer/payment requests and changes in banking information, training helpdesk or call centers on social engineering risks, enabling end-to-end encryption and updating response plans.

About the authors

Danielle Valkner
Danielle is an advisory partner leading our family office practice in the US and sesrves as the US Office Leader. She advises clients on the unique needs of family offices and private wealth owners in the areas of technology automation and innovation, finance effectiveness and reporting, process improvement, operating model transformation, risk management, and vendor selection and implementation. Prior to joining PwC Danielle worked for two large global asset managers, gaining extensive industry experience in Chief Financial and Chief Administrative Officer roles. She also spent over 10 years as an auditor in the financial services sector. Danielle graduated summa cum laude from Augustana College. She is a licensed CPA and an Elijah Watt Sells award recipient.

John Boles
John is a Principal in PwC’s Cyber Practice, specializing in threat prevention and remediation. With over 27 years of experience in federal law enforcement, national security, and cyber operations, he has led investigations worldwide in areas such as cyber, fraud, terrorism, and violent crimes. He has also advised the White House and National Security Council on cyber-related issues.
 
PwC
PwC’s global network of nearly 328,000 professionals in 152 countries has been dedicated to building trust in society and solving important problems for more than 170 years. We work with ultra-high net worth individuals to holistically manage the complexity of personal wealth and help create a legacy that will endure for generations to come.