Morgan Stanley is using AI to improve efficiency and deepen the relationship between its advisers and customers. 

The bank is deploying technology to aid growth across its three divisions — investment banking, wealth management and institutional securities — Chief Financial Officer Sharon Yeshaya said during Morgan Stanley’s second-quarter earnings call today. 

“AI tools are helping advisers grow, and wealth management’s partnership with institutional securities is increasing connectivity around our workplace offering,” Yeshaya said. “These investments have supported flows to our adviser-led channel, where average client duration is nearly 15 years and growing.”

The New York-based bank is “committed to client and asset growth, technology and targeted investments to ensure robust infrastructure that supports growth,” Yeshaya said. 

Morgan Stanley Debrief, an AI-enabled tool that takes notes on an adviser’s behalf in meetings with clients, was rolled out in the first quarter, Jeff McMillan, head of firmwide artificial intelligence, previously told Bank Automation News. 

The bank also deployed Morgan Stanley Assistant, which helps advisers conduct research and access the Morgan Stanley database, McMillan said. 

The bank is working with OpenAI to develop AI tools and has multiple use cases in the development pipeline, he said. 

THE BIG PICTURE: Morgan Stanley has been deploying technology to aid core operations growth, including mergers and acquisitions processes. 

The bank is enhancing its adviser toolkit and deploying technology as it enters “the early innings of a multiyear M&A cycle,” Yeshaya said during the bank’s Q1 earnings call in April. 

In the next couple of years, the $212 billion bank expects M&A activity to normalize, which is going to be “a multiyear investment banking-led cycle,” Yeshaya said today. 

“Advisory revenues were $592 million [up 30% year over year], reflecting an increase in our completed M&A activity versus the prior year,” Yeshaya said, adding that “we are seeing M&A pipeline kicking in.” 

BY THE NUMBERS: In Q2, Morgan Stanley reported: 

• Net revenue of $15 billion, up 11.9% YoY;  

• Non-interest expenses of $10.9 billion, up 4% YoY; 

• Information processing and communications expenses of $1 billion, up 9% YoY; and 

• Headcount of 79,066, down 4% YoY. 

OF NOTE: Bank of America is also deploying AI to improve customer satisfaction as digital banking adoption continues to grow. 

“AI has moved from cost savings ideas to enhancing the quality of our customer interactions,” Chief Executive Brian Moynihan said during today’s Q2 earnings call. 

Other financial institutions including Rocket Mortgage, Ally Financial, and U.S. Bank are deploying AI to improve customer satisfaction by providing them with more self-service capabilities and improve internal efficiencies.

MARKET REACTION: Morgan Stanley shares were trading at $106.22, up 0.84% on Tuesday trading at market close. 

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