Why Does Artificial Intelligence Matter?

Technology is changing investing, and there are a lot of reason for this. After all, technology has already made our day-to-day activities easier, revolutionized the work world and opened us up to a global market, so it’s only natural that investing would be impacted.

As for impact investing, it can be argued that technology is why it is growing as a force in the market. Our wider global view has made more people aware of injustices and wanting ways to offer help and these new technological advances make it easier to donate to causes far beyond your own backyard.

What can make impact investing grow even stronger? Artificial intelligence. AI has been and will continue to transform the financial industry (and the world at large). Considering the positive impact AI would have on impact investing it almost seems imperative that the two join forces.

Let’s look at the reasons why AI is perfect for impact investing.

Both impact investing and AI are newer players in the investment field and serve as great examples of innovations that are improving our world.

Impact investment aims to make a tangible difference in today’s world. Rather than just serve as a way for people to expand their wallets, it uses funds to help groups that are in need of (financial) assistance in order to stabilize their world.

Introducing AI will accelerate the process, and this will in turn result in a quicker impact. For many recipients of impact investing, this is great and needed news. Not only that, by analyzing the data at a much higher rate, AI will help investors and startups make the greatest impact. As the population increases and crises become larger, we need solutions funded and on the ground faster.

The partnership of AI and impact investing may just be the best way to change the world.

Ironically, impact investing and AI also work well together because they minimize the potentially damaging effects that come from technology– which forms their structure.

One of the elements found in the environmental, social, and governance (ESG) score is human capital. This means startups and companies seeking funds via impact investing will need to show that they have a well-established human base in order to warrant consideration from the AI system.

As the work world becomes more automatized and job losses are an unfortunate side effect we should be aiming to support companies that support humans. At the same time, the lure of technology and its benefits mean we can’t ignore technology. The good news is the two sides can work together for the greater good and the team up of impact investing and AI will help raise up the startups that are doing what they can to improve humanity.

There are investment companies that see the potential in these innovations and their usage of the technologies are great illustrations of the power in this team up.

Ellevest is one of the newer entrants in the AI impact investing race and one that has the background to use the tag team to make a real impact.

The company, led by Sallie Krawcheck, has started offering Ellevest Impact Portfolios in order to best serve modern investors seeking to make a difference.

These portfolios will invest in companies owned by women and minorities that rank high on the ESG scale, ensuring investors’ money is going to a good place and will make the positive impact so many of us want to make.

This is a logical move, as women have shown a high interest in supporting sustainable businesses and studies by McKinsey and Reuters have shown that empowering women to run their own businesses and participate in the global economy could dramatically increase GDP growth.

The positive effects of Ellevest’s efforts will be enormous and important. I look forward to seeing the impact they have around the world.

Environmental awareness is steadily growing and more and more people are becoming interested in supporting eco-friendly companies. Not surprisingly, this is another area where the true power of the AI/impact investing partnership can be seen.

Take Swell Investing for example. This impact investing platform is designed to help investors create portfolios that support companies making an eco-friendly impact. The platform allows users to choose from portfolios in clean water, healthy living, disease eradication, renewable energy, green tech and zero waste to create their own, as the company’s video calls it, “diversified Swell mix.” For investors wanting to do good while also increasing their income this new option is a win-win.

Impact investing is a fantastic idea and pairing it with AI makes it even better as it will really make the investment worthwhile. This team-up is exactly where investing should be going.