Generative AI for Analysts
This addresses the impact of generative AI on financial analysts' productivity and accuracy, revealing both gains and cognitive limits in a specific domain.
The study examined how generative AI transforms financial analysts' work using FactSet's 2023 AI platform launch as a natural experiment, finding that adoption increased report richness (40% more sources, 34% broader coverage, 25% more advanced methods) and timeliness but also raised forecast errors by 59% due to cognitive challenges in synthesizing balanced information.
We study how generative artificial intelligence (AI) transforms the work of financial analysts. Using the 2023 launch of FactSet's AI platform as a natural experiment, we find that adoption produces markedly richer and more comprehensive reports -- featuring 40% more distinct information sources, 34% broader topical coverage, and 25% greater use of advanced analytical methods -- while also improving timeliness. However, forecast errors rise by 59% as AI-assisted reports convey a more balanced mix of positive and negative information that is harder to synthesize, particularly for analysts facing heavier cognitive demands. Placebo tests using other data vendors confirm that these effects are unique to FactSet's AI integration. Overall, our findings reveal both the productivity gains and cognitive limits of generative AI in financial information production.