AI Eliminates Human Bias – Manuel Ebner on the New Era of Investing
Manuel Ebner, a seasoned banking expert and former top-tier consultant, has taken on a new role that places him at the cutting edge of investment innovation. Yet as he reveals in this interview with finews.asia, his journey with artificial intelligence began more than 25 years ago.
Manuel Ebner, you were working with artificial intelligence (AI) more than 25 years ago. What were you working on at the time?
At the time, I was the CEO of Artificial Life Switzerland, a company providing AI-supported online advisory tools for European asset managers.
We developed tools that supported the entire investment process – starting with KYC/AML checks and the creation of risk profiles, through strategic and tactical asset allocation, instrument selection, portfolio optimization, and execution.
You recently assumed the chairmanship of the Swiss asset manager Smart Wealth Asset Management. How involved are you in this company?
My role is that of a Non-Executive Chairman. But I have a clear intention to actively support Smart Wealth in the areas of strategy and growth.
What other roles have you taken on since you departed from Bank of America (Switzerland) in June 2023?
I’m a Senior Advisor at ClearSky, an American venture capital fund focused on energy transition, decarbonization, and cybersecurity.
«Generative AI has evolved into an independent innovation sector»
In addition, I am a board member at Arival Bank, a Puerto Rico-based fintech bank specializing in global SMEs without a US domicile but seeking a US bank account and access to the US payment system.
What have been the key AI milestones over the past 25 years?
In my view, the three most important developments may not have a direct connection to AI itself. But they seem all the more important to me: First, the cost of AI computation has dropped drastically, while computing power has increased exponentially.
Second, AI – and particularly generative AI (GenAI) – has evolved into an independent innovation sector, which has led more and more developers to create new solutions based on it.
And finally, there has been a cultural shift: the general public has not only recognized the value of AI but has begun to actively use it.
How widespread is the use of AI in the financial industry today?
AI is already being used in many areas of banking and finance, especially in customer service, automated report generation, intelligent support for client advisors, and compliance checks.
«For a long time, it feels like little is happening – and then everything moves very fast»
While the early use cases primarily focused on increasing efficiency and cutting costs, many banks are now using AI more intensively for value creation – for example, to improve research departments or to generate personalized investment proposals.
What are the main advantages of using AI?
The AI-driven investment approach used by Smart Wealth offers several key advantages: it eliminates human bias, consistently delivers above-average returns, and does so at costs comparable to those of passive providers.
In addition, it overcomes the classic trade-off between liquidity and return.
Can you explain that a bit more?
When implemented correctly, AI can lead to long-term investment success. We use AI selectively in many areas of the investment process, such as in analysis and forecasting.
We employ AI in portfolio optimization for strategic asset allocation to optimize portfolios along the efficiency frontier. The portfolio optimization function maximizes portfolio returns for a given level of risk.
Why has AI only now entered mainstream awareness?
This is typical for technological breakthroughs: for a long time, it feels like little is happening – and then everything moves very fast. Our team has been using AI in asset management for more than 20 years to develop better AI-based investment solutions and to outperform the best human asset managers each year.
«To be clear, we are not using a high-frequency trading model»
Over time, there have been numerous specialized applications of AI, but the true turning point that shaped public awareness was the introduction of powerful language models (LLMs) – in particular, the public launch of ChatGPT in November 2022.
Smart Wealth is now launching two funds based on AI technology. What is the investment strategy based on?
Our goal is to achieve better returns for each given level of volatility. We focus on global blue-chip stocks and liquid ETFs and take only long positions, based on asset selection and allocation by our AI, which identifies those with the highest expected risk-adjusted return.
To be clear, we are not using a high-frequency trading model. Rather, part of our philosophy is to avoid unnecessary transactions and to save on transaction costs wherever possible.
What is your target client base with this offering?
Our LLP investors include a variety of renowned family offices worldwide. We are now opening the funds to institutional and qualified private investors.
Perhaps your question can also be answered this way: our AI model delivers high-yield results in the style of alternative investments, but based on liquid core assets and with daily liquidity.
How frequently does your AI model adjust the portfolio composition?
The portfolio is readjusted quarterly to ensure that expected return and volatility remain within the target range. Additionally, our AI makes forecast-based adjustments – in other words, it only trades when the forecasts for future developments change.
«In rare cases – for example, on a ‹Liberation Day› – AI can also make an immediate decision»
This is not a fund with too many daily transactions; positions are typically held for weeks or even months. In rare cases – for example, on a «Liberation Day» – AI can also make an immediate decision to significantly increase the cash quota.
Which markets does your model take into account?
The focus is on the major global markets, with a practical tendency toward overweighting US markets.
How does the model respond in negative market phases or even crashes?
The model bases its trading decisions entirely on data. If a forecast signals a potential decline or the AI detects that a security is deviating from its typical behavior, it increases the cash allocation. This approach generally helps limit losses and preserve capital until market conditions stabilize.
You also offer your equity fund in both a UCITS and a Sharia-compliant version. Why?
In our conversations with family offices and distribution partners worldwide, we were sometimes asked for a UCITS fund and sometimes for a Sharia-compliant one. The adjustments required for this were easy for our AI to implement.
In which markets do you expect additional growth due to Sharia compliance?
The demand is global. But Sharia-compliant funds are particularly interesting for investors in the Middle East and Southeast Asia.
«In compliance, AI has a very positive impact»
At the same time, the Global Equity Fund is also attractive for European and Asian institutional investors specifically looking for a UCITS-compliant product.
Which developments in AI will shape and ultimately change investing the most over the next two years?
We’re seeing generative AI (GenAI) increasingly used in research work and to support relationship managers in wealth management. In addition, GenAI is being used to further personalize sales and marketing. AI is also having a very positive impact on risk management and compliance, as it helps automatically detect anomalies and deviations.
I’m convinced that Smart Wealth’s approach remains truly unique. Our AI model not only delivers key analyses but also makes investment decisions that, in most firms, are still left to humans.
Manuel Ebner looks back on a long career in banking. However, his professional journey began in management consulting, notably with Booz Allen Hamilton, the Boston Consulting Group (BCG), and later McKinsey. In the late 1990s, he was CEO of Artificial Life Switzerland, a company that developed AI-based chatbots. He moved into banking in 2006 as the CEO of BZ Bank, founded by his uncle Martin Ebner. In 2010, he joined Bank of America (BofA), where he worked for 13 years, most recently as CEO Switzerland. For the past two years, he has held various board positions and recently became Chairman of the Board at Smart Wealth Asset Management.
