What is AI? How Are We Using It?

You’ve probably heard the term “artificial intelligence” (AI) more frequently lately, but what does it really mean and how does it impact you? 

Today, the impact of AI reaches far and wide. From the valuation of public companies building the infrastructure, to businesses implementing AI tools, to individuals using it for everyday tasks. AI is everywhere and touches nearly everything. That’s why we want to address what it is and how we are using it.

What is AI? 

At its core, AI is a type of computing software that can be prompted to perform basic tasks more quickly than a human. It can search the web, summarize information, make calculations, identify patterns, generate or edit images, and more in seconds – all from your desktop, laptop, or handheld device. What makes AI unique is that it can learn and improve over time, adapting its responses based on how it’s used. This makes it feel less like a machine and more like a helpful assistant.

AI is the next level of high-powered computing making way for human efficiency – a digital personal assistant that helps with everyday tasks, answers questions, and even offers help brainstorming creative ideas and solutions.

There are many types of AI Software. Let’s look at the top 4 and how they’re used:

• Machine Learning powers a huge range of applications from recommendation engines like Netflix and Amazon, to fraud detection and predictive analytics in industries handling a large amount of sensitive data like finance and healthcare.
• Natural Language Processing (NLP) is the software behind chatbots and virtual assistants like ChatGPT and translation tools like Google Translate.
• Computer Vision is used across a multitude of industries for image recognition and analysis, quality control, security, and surveillance.
• Generative AI is a content creation software used broadly for text, images, video, music, code, and more.

Each type of AI software can either be closed loop or open loop. What’s the difference and why does it matter? 

• Closed loop AI operates like a self-contained kitchen – the recipes, ingredients, and tools are already there. The chef does not leave the kitchen to get new ingredients or share recipes with others.
• Open loop AI is like a communal kitchen – multiple users come and go from the kitchen, sharing equipment, recipes, and ingredients.

Whether the software is closed or open has implications for the user. Closed loops are private, secure, and the data is controlled. Open loops are connected, flexible, and learn from external sources. Both have their own benefits, tradeoffs, and potential use cases.

AI has broad applications for personal use. For example, I bake a lot in my free time and frequently use ChaptGPT to help me generate new recipes or modify existing ones. When I’m out of a certain ingredient, instead of going to the store I can ask AI questions like:

• “What can I use instead of buttermilk in these biscuits?”
• “How much salt do I need in this recipe that calls for salted butter when all I have is unsalted?”
• “Can you scale this recipe up to 18 servings?”

It gives me helpful, accurate suggestions and calculates measurements in seconds. Sure, I could figure it out myself by searching online and doing the math, but AI is simply more efficient.

I also use AI when I travel. From creating an itinerary to finding the cheapest flights, AI has become a very important part of my travel preparation. I even use it when I’m on the go in another country. I can point my camera at signs or menus in another language and get real-time translation.

Both applications I discussed use open loop software, which allows me to pull the most up-to-date information from the web. Because it’s open loop I avoid sharing personal information in my queries. 

Beyond personal use, AI is quickly becoming a go-to efficiency tool for businesses of all sizes. From automating routine tasks to unlocking new insights from data, the potential is enormous. 

How Are We Using AI?

At Peak, we’re exploring new ways AI can support our team and improve the client experience while keeping privacy and cybersecurity front and center. From virtual notetakers, to tools that help us visualize and track market trends, every tool we consider must meet rigorous standards, not just for performance, but for how it handles sensitive data and integrates securely into our systems. 

We will always remain transparent with our clients about the technology we employ. Here’s what we’re looking for as we vet AI tools and what you should be thinking about too:

• Intended Use

1. 1. • AI tools are meant to increase efficiency, not replicate or replace human intelligence. 
      • AI will not be used to generate financial plans, make recommendations, or make trading decisions.
      • AI may be used to summarize meeting notes, create follow up tasks, or support broad data analytics.

• Data Privacy & Compliance

1. 1. • All tools must comply with FINRA recordkeeping regulations.
      • Tools with access to personal information are always closed loop.
      • We control what client information, if any, is accessible to the tool.
      • We know and trust how data is stored, processed, and shared.
      • We require ongoing training for all users.

• Transparency & Explainability

• • • We ensure the AI’s information processing can be explained and meets our standards.
    • We equip users to verify outputs for suitability, accuracy, and fairness.

•  Security of the AI Tool and Its Servers

• • • We only use vendors that provide ongoing monitoring as support, always scanning for vulnerabilities in the tool and employing appropriate mitigation strategies.
    • We vet the tool’s integrations, data storage policies, and the security of those components.

AI is transforming how we work, communicate, and manage information, but it’s not without risk. By staying informed, asking the right questions, and taking proactive steps to protect your data, you can embrace the benefits of AI while minimizing exposure to threats. We will continue to keep you informed about how we choose to integrate AI into our business. If you have questions about how we’re using AI or how to protect your digital life, we’re always here to help.