Long on sustainability: Managing climate risk and responsible investments with AI

When MSCI announced an expanded partnership with Google Cloud last year, sustainable investing was a key focus of their work, along with better portfolio risk assessments and developing industry-specialized conversational AI. Since then, AI adoption has accelerated considerably and the MSCI and Google Cloud relationship has only deepened.

Headquartered in New York, with more than 6,000 employees across 25 countries, MSCI provides critical decision support tools and services for the global investment community.

“We pride ourselves on data quality and security, which are critical for our clients, who include asset managers, asset owners, and banks among others — and AI is a key component to transforming and enhancing our platform,” said Deepesh Mohnani, head of AI and managing director at MSCI.

Recently, Deepesh Mohnani sat down with Gaurav Hind, director of engineering & CTO for capital markets and digital assets at Google Cloud, to discuss how MSCI is leveraging AI and innovative technologies to deliver pathbreaking products that are helping to transform the financial services industry. They delved into the fast-growing role of gen AI in financial services, what it takes to build gen AI solutions, MSCI’s partnership with Google Cloud, and the broader implications for investors and financial institutions.

Hind: How is gen AI transforming financial services, and how does MSCI fit into this landscape?

Mohnani: AI has long been part of our landscape, but recent advancements in large language models, and their popular adoption through consumer AI apps, have made it accessible to a wider audience, from non-experts to data scientists.

In financial services, AI is revolutionizing how we analyze market data, synthesize information, and uncover critical insights, driving efficiency and more informed decision-making. This technology is reshaping our industry and is expected to have a profound impact on the global economy and the future of work.

With over a decade of experience in AI, machine learning, and deep learning, we enhance our data, content, and models to transform the client experience. Our expertise allows us to connect data in meaningful ways, empowering clients to create differentiated investment solutions.

Can you give us some examples of how AI is helping MSCI transform to better serve their customers?

For starters, our partnership with Google Cloud has been foundational in driving our AI transformation. Our Data Acquisition Platform (DAP) is a great example of how we are working together to help achieve our objective of providing “data at scale,” leveraging AI. Gen AI has enhanced our ability to process alternative and unstructured data with increased accuracy and scalability across our organization. With gen AI we can collect and generate exponential data with higher accuracy at a faster pace. This scale would not be achievable in a world without AI.

We are also transforming how we surface and deliver actionable insights to our clients, delivered at a faster pace to facilitate better decisions. In June, we launched Geospatial Asset Intelligence to help clients understand the level of physical risk in their portfolio or loan book by delivering drill-down insights to individual asset locations, such as properties, facilities, or other kinds of physical capital.

Geospatial intelligence of where a company operates is essential for risk management, investment and lending due-diligence, alignment with regulatory requirements, and corporate engagement. The solution uses AI-driven document parsing and extraction, geospatial processing through BigQuery, and raster processing with Google Earth to help pinpoint these risks.

Tell me more about the Data Acquisition Platform and how this is a differentiator for MSCI?

Through the integration of advanced AI methodologies and strategic technology partnerships, the Data Acquisition Platform (DAP) helps us centralize our data operations to create scale and deliver client-centric solutions at a faster pace. By employing gen AI and agentic frameworks, we have significantly streamlined our model development lifecycle, reducing timelines from six months to mere weeks. This acceleration enhances our agility in responding to market dynamics and client requirements.

The platform's architecture is designed to efficiently handle the increasing influx of unstructured data, particularly in emerging domains such as climate analytics and private asset evaluation. The DAP's robust infrastructure addresses critical business challenges, including scalability, processing speed, accuracy, and cost-efficiency, thereby enabling the extraction of actionable insights and the identification of new revenue streams.

Our collaboration with Google Cloud further augments the DAP's capabilities, providing a secure and scalable environment for data processing and storage. This partnership leverages Google Cloud's AI and advanced analytics tools, facilitating the ingestion and analysis of both structured and unstructured data at scale. This collaboration underscores MSCI's commitment to adopting cutting-edge technologies, reinforcing our position as a leader in the rapidly evolving financial services landscape, and delivering substantial value to our clients.

How does MSCI address data privacy and security concerns when using AI?

Data privacy and security are paramount at MSCI. We are aligned with the foundational principles codified within our policies and standards and have established strict governance processes to ensure client data is handled with the utmost care. Additionally, we have robust internal policies to prevent the misuse of data and help align with all applicable legal requirements, and we audit our partners on a regular basis.

Our strong AI governance process includes a data-centric risk assessment for the control environment and adheres to evolving legal and regulatory requirements. As a result, we’re able to provide transparency and maintain trust with clients, and rapidly address their concerns.

How does Google Cloud and MSCI work together to deliver solutions that help solve your clients’ critical challenges?

We’ve benefited greatly from hands-on learning amongst our teams. We recently concluded our second hackathon with the Google Cloud team, where they provided invaluable resources, including enablement training sessions, online mentorship, and on-site support in our offices across the globe. We’ve achieved tangible outcomes from these sessions, where ideas have turned into compelling solutions for us and our clients. The hackathons have helped to deepen our relationship, provide a better understanding of how to work together and have been the spark for accelerating innovation. We will continue to nurture this relationship with hands-on learning.

Where do you see your work on AI going next?

MSCI has been working with Google Cloud for almost two years, and together we have innovated quickly as the race for AI adoption accelerates. As one of the leaders in technology and financial services, we are in a unique position to provide cutting-edge solutions that bring efficiency and innovation to the global investment community. It’s been a fascinating relationship from that perspective, and it gives us the confidence to move forward and provide solutions that help transform the industry.

Looking ahead, we see great potential in expanding our AI capabilities, particularly in data analysis, data quality, and distribution using large language models. Our partnership with Google Cloud will continue to play a key role in these developments, particularly as we push and challenge each other, and explore new AI-driven solutions to meet evolving client and industry needs.

To learn more about leveraging cloud technology to drive innovation and enhance customer experiences, reach out to a Google Cloud expert today.

Opening image created with Imagen 3 running on Vertex AI using the prompt: A visual metaphor for the concept of responsible investing drawn in a flat style with an arm in a suit entering the frame from above, holding a watering can, except instead of water, dollars are flowing out directly onto small wind-power windmills that are sprouting out of the ground like seedlings, and the ground fills the entire bottom of the frame.