How Financial Services Leaders Can Adopt AI Without Creating Compliance Disasters

Speaker A: And then I see the people that know how to do it leaning on AI to help them accelerate their vision and see it go faster.

Speaker B: When the rubber meets the road, all of that AI stuff evaporates.

Speaker A: AI is such an amazing sword to

Speaker B: wield, but you're still looking at somebody eye to eye, and you have to make that call.

Speaker A: Hey, everyone, welcome back to AI With Bry, the show where we're cutting through the noise and helping leaders learn leverage and lead with AI. I'm, um, Brian Dunstead, and you can think of me as your chief AI officer. Helping you find your path here is a combination I don't think you find in one person very often. Someone who's personally closed 21 deals totaling over a billion dollars. I believe in sales. And then you walked into a PhD program to study exactly why those deals succeeded or failed. At this human level, it's cognitive biases, its power dynamics, it's negotiation behavior. The stuff that nobody talks about in the boardroom, but I think it determines almost everything. Aydin Oxoi is an assistant professor of entrepreneurship at the University of Hartford, where he is teaching strategic management and studies how entrepreneurs and investors actually make decisions under pressure, not how the textbooks say they should. He has operational experience running a 15 million dollar enterprise with international mergers and acquisitions background, spanning the US and global markets, and research that sits right at the intersection of human judgment and strategic risk. And right now, AI is crashing into every part of that equation, in my opinion. So, Aydin, welcome to the show. I'm so glad you're here.

Speaker B: Pleasure to be here. You know, uh, this is. I'm really looking forward to this conversation. Just one little correction in that, you know, you said I personally closed. I was more like the donkey pulling the cart for my boss. Right. We all are.

Speaker A: Especially when it has a B tied to it. Yeah.

Speaker B: Right. But no, thank you for that introduction.

Speaker A: Yeah, I. I appreciate that. Yeah, we're all part of the bigger team helping these things go so well. I want to jump straight into, like, the Learn segment. So, you know, professor, deal maker, researcher, entrepreneur yourself. You know, tell me a little bit more about how those worlds all connect from you, your work at the University of Hartford and what you drew, you really into studying how entrepreneurs and investors make these key decisions. I'm intrigued because I have to make these decisions all the time myself.

Speaker B: You know, I got lucky. I was 25, uh, when I got hired by, uh, a gentleman, um, who, when he hired me, said, it's clear you don't know anything, but I'm Going to give you a chance. And that, and that serendipitous interview landed me on the C suite of a $2 billion division of a large global entity based out of Dublin, uh, crh. Um, construction. And I got to really see how the decision making at that corporate level operates. Boardroom discussions, strategic issues, what company to buy, where to expand into. Uh, and then they gave me an operating role. They gave me that branch in, uh, Long Island City, Queens, overseeing drywall distribution, uh, for all five boroughs in Long Island City. And that was a blast. I mean, you have 11 trucks, you have about 14 teamster union people who are the nicest people to work with. You have billing, pricing, you got credit on the street, you have inside sales, outside sales, all this stuff happening. And it's, and what was interesting about New York is in other, uh, areas you can stage out deliveries throughout the week, you know, later in Thursday, Friday, what have you in New York. All your trucks are rerouted every 24 hours. And so it makes for a very interesting, high paced, uh, uh, uh, environment. And then, um, I got invited to get this, uh, strategic management, uh, to go to the strategic management PhD program. And in there I had, I was just fascinated with everything I read. So I just threw myself into every, uh, uh, school of thought and I think, you know, and I really landed on transaction cost economics and cognitive biases and how power shifts because I, for the angel investor, so the elder type of AI. Right. Which is very fitting here. Uh, you know, I was just fascinated by how these individuals that are individual, independently wealthy make these discretionary investments in, you know, where 70% are a total loss and yet every year $20 billion is being invested. I was fascinated by this world of heightened subjectivity, you know, where our cognitive biases, you know, should sp. Spike and we should be in our weakest state in a decision making environment. And, and so, um, and I'll talk further about all this stuff, you know, but that's kind of the progression that's led me here. So now I'm 100, focusing on, um, angel investors, uh, from the angel investor perspective and, and have been researching intuition, um, uh, uncertainty, all that stuff.

Speaker A: Yeah. Ah, so fascinating because it's, it's a really interesting problem. I see. Because, you know, you, you get, I get, you know, you get that financial independence level and it's like, okay, cool, I can do whatever I want now. I'm financially independent, uh, maybe I can't do anything I want, but like, I don't have to worry about, you know, the food on the table question anymore. Right. Uh, so as an investor, then you go into this next stage of like, okay, is it, what legacy am I trying to build? What am I trying to do to change the world? You know, what, you know, what is, what's, what's the need I have in my life? You know, it's cancer for some people or this, that, the other thing. So they figure out that thing and they pour into it. And I think it's a lot of emotions that go into some of those decisions. So it's so, so interesting you get to study this at the PhD level. I have so many questions. It almost feels like a different podcast that we should do on that one for sure. But I'm curious like as this, as the GPTs and the clauds come online, what are you learning about how AI is starting to affect those, those decisions? I was just reading an article, I think about how the fact that there are certain words like delve. AI uses the word delve a lot more because it's keyed, you know, whatever training data has had. And now delve is resurfacing as a language word in the uh, English language and it's getting used a lot more now. That's our training data influencing the GPT output that's now influencing us to change and reshape our vocabulary that we're using. And we've mentioned delve at least three times on this podcast. So it's working, right? I mean, um, so that's, that's an example. I'm just like seeing how, how are you seeing the decision making process that these people go through changing and what have you learned about how AI is impacting that?

Speaker B: So just out of curiosity, you know, delve in the sense, uh, of, to delve into something that we're, uh. Well, you know, this, it is interesting what you say. It doesn't surprise me, um, uh, that it's had such an impact already. You know, from a business perspective. I mean just using, looking at AI as a tool, um, it has certainly improved, you know, the speed at which you can operate the quality for. But I, you know, going back to economic theory, ultimately at both ends of the transaction are human beings. So you know, John r. Commons in 32, 1932, I believe also in 34 highlights a very crisp statement, uh, that, that a transaction is the basic unit of measure in an economy.

Speaker A: Mhm.

Speaker B: And, and incidentally in 1934, uh, uh, the concept of a GDP was, was brought before brought forth.

Speaker A: Yeah.

Speaker B: So that notion is. So, so a transaction is the unit of measure in an economy. Well, a transaction is currently bound by two humans. And so you can't, you know, let's think about a world, or maybe not think about that world where two robots give each other stuff and generate money. Um, there. The notion of consumption has to ultimately come into play here.

Speaker A: Yeah.

Speaker B: And so I'm looking, you know, so the biggest benefit that I've seen is from a, uh, communication perspective, is to get this other human that you're trying to convince or to agree with you, to see what you see. And that might have taken. Taken time to hire an artist to draw a rendering. Now you can do that with AI. It could have taken you, you know, weeks and months to find a program developer to be able to sketch something out. Well, now you can do that. You know, and I'm not saying that that's a full replacement of, uh, you know, what, what you need to do. I mean, I guess in some business slivers that's all it would take. But clearly you have to still develop the team and work through this. But, you know, ultimately it's, it's, you know, from a business perspective, how I'm looking at AI as opposed to so much of a societal perspective. You know, I'm comforted by the fact that a human has to consume this thing and buy it. At some point. The economics have to make sense.

Speaker A: Yeah. Yeah, I love, I love that. I wanna, I wanna unpack that a little bit more in the leverage and lead section because I've got. I wrote down a couple notes here. I'm curious though, like, you're teaching students about this, right? I mean, I think you're. From my research on you, you're teaching the capstone course on strategy at Hartford. Uh, taught that at odu.

Speaker B: So right now I'm teaching a, uh, Intro class, Entrepreneurship 314 at the University of Hartford. It's my baby. I love it. It's. I get ballerinas, engineers, pottery students, some who have never taken entrepreneurship ever. Or business ever. They're walking in coal. So 47 different majors have walked through the door. And I teach them a process, um, of, of how you think. You know, but I think anticipate your question. I'm sorry, I cut you off. I structured a class so they can't really use AI.

Speaker A: Ah. Uh, I'm interesting how you, how you did that, because I was going to ask my questions, like, how are you seeing AI show up and how your students are thinking about strategy and where are they making mistakes? Because, like, I watched this one professor on TikTok or something say he did that little Skittle challenge. I don't know if you've seen this video where he gave every student a bag of Skittles and says, cool. At the end of class today, because we're talking about entrepreneurship and economics and all that kind of stuff. At the end of the class, whoever has the most of one color Skittle wins. Go. And the whole day you just trade Skittles. But I just have to put out the rule that says every time you trade a Skittle, you. You have to come to me, the trading board, and I take one Skittle as a payment to record your transaction. And so the students went off and traded for 30, 45 minutes. And, you know, some student got a million, um, reds because he's got great negotiation strategy skills. And he's like, so what was your lesson? How was the trading? How did it all go? And the one guy who won, thinks he won and said, you know, you know, I did great. This was my strategy. This is how I did it. And he. And then the teacher goes, well, let me dump out my Skittles and see how many I have. And he had a boatload of Skittles, more than the entire class. You know what I mean? He's like, but you didn't see, the point was every economy has a tithe to some, you know, overseer that's secretly doing, whether it's MasterCard or the FCC or the taxes or all those things. I don't know. I just found that super fascinating as a little lesson. I can send you the link to that or put it in the show notes here. But I'm just curious, like, what do you. What are you seeing with, you know, how did you block them from using AI? I'm curious how that's going to happen. And then how are they thinking about strategy with AI showing up in everything we do?

Speaker B: Well, so partially block them, I guess. There's this one little assignment that I focus on their sentence structure and how they create a document. And, um, there they can use AI. I'm sure they have. I know they have, but it doesn't help them with their grade. Right. Uh, so they realize later that I should have just actually done the work. And the people that did do the work that. That got a very good grade and did use AI told me they had to go through 3, 4 hours of using AI to get it to what I wanted. So I can. I construct a. Well, I create a structure for the document, and I require them to provide specific uh, uh, components within that. And uh, but it, you know, it seems very basic. You would think that AI would be able to do it, but, uh, for whatever reason, uh, it doesn't. And, and I think that a lot of older versions of these assignments are floating around that are all very poorly done and wrong because my feedback isn't circulating. And so a lot of people, you know, repeat what's been done before and making the same mistakes, which gives me an opportunity to teach them. So I know that they are going out to use AI, but the AI information is not, it's pulling from bad information. So they're giving me bad output. That's one little sliver. But the main thing that they have to do is present to their alumni. So we work for 13, 14 weeks, uh, to develop a business idea. And I say, listen, I'm going to give you the benefit of the doubt. Whatever you come up with, I'm going to believe that you're going to be able to generate sales. Now go. Right. And your objective is to present, stand tall in your institution and deliver your message to your alumni.

Speaker A: That's right.

Speaker B: And I will be receding out of your life to just becoming a clicker at the end day where I say nothing and just click through your slides as you flippantly tell me to change slides. Yeah, but now you're standing up alone and there's nowhere to hide. And so, um, that process, they, AI doesn't, because ultimately they have to find their own, first of all idea, but they have to find their own voice and then they have to communicate that. And these little subtleties such as give me a financial rendering of your business. It's all projections. Yes. But it gives them an opportunity to showcase how they see the world.

Speaker A: That's right. That's right.

Speaker B: To the audience. And which is the most important thing from, from this entrepreneurship angel investing environment. You're, you want, you're sitting across another human. You want to understand what this human is and how they see the world. And if it's these prepackaged AI things that don't allow you to express your character, it's, it's just a hard stop, you know. And so I had my, I just last point, I had my biggest semester this semester. We started with 51 students and I had to say no to 14 students who try to get into class. There's a cap. So I was ecstatic. Right. People love the class.

Speaker A: Yeah.

Speaker B: Um, only one student submitted something with AI and they only did it for one of the three updates that I give Them three update feedbacks throughout the semester and so they realize that they have to actually go back and do the uh, hard work.

Speaker A: Yeah, yeah, yeah, I agree and I appreciate that because I see, I see two lenses of it. I see the people that are leaning on AI because they have no clue how to do it. And then I see the people that know how to do it leaning on AI to help them accelerate their vision and see it go faster. So I think it's, we still have to go through that learning process to master it. And then AI is such an amazing sword to wield. Um, it helps with the places that we don't know, but it doesn't, it doesn't do a good job to replace the expert that's still out there.

Speaker B: Well, 100%. And you know, like just my, my own research and my own writings, I have yet to use AI to write a single sentence, especially when I'm doing philosophy, like uh, working on a paper, um, that it's on the notion of a priori, uh, uh, information or knowledge that exists outside of our experience. M. Uh, Immanuel Kant, 1787. Uh, the critical problem synthetic a priority. You know, it's as I'm, I have to submit this document to a human editor and I have about 5,000 word constraint and I have to. There's so much I'm trying to weave into this. I don't even know what I would ask AI to uh, you know, to come up with the next sentence. I'm still coming up with the next sentence. So there's like for me AI is completely useless in that regard.

Speaker A: Yeah, it's, it's, yeah, it's changing in a big, big way for sure. I, I agree. You can't because the, the philosophy side of it gets intermingled with so many different perspectives. I, I feel it's always going to some sort of bell curve too because that's really what the AI is doing is just trying to get you the rote median answer on almost everything. So true entrepreneurship is going to be unlocked because AI can go, can accelerate you so much faster. It can take your idea and bring it to life. But I just don't think AI is good at generating the ideas. Um, so it's, I guess I see it as we head into the leverage and lead segment here in some fashion that I think the, the economy has to change because the life cycles are going to change. Right. So I talk about this with a lot of my clients as a fractional CTO that you need to um, rethink Everything about your business because, because I think there's two big things that have happened. Like I, as a developer now can get it done really quickly. I need the idea and the requirements. The stuff that you're teaching in your class is the key. Because once that idea is, is thought of and codified into the slide deck and the concept, I can now build it in probably less than a week. That, that may have taken one month to two years before, and now we can build it that fast for you. So like imagine when the idea, well, flows and the ideas can be brought to life by the snap of a finger and that's where the newer models are heading really, really fast. But I also think, like, I'm curious your perspective because you were talking about the human to human piece of this. And I think we've been limited in business by human capacity. There's only 8 billion people on the planet that could work, that could do something. But now AI is here and I can hire the AI agent to do it. You know, so it's like I can go, I can have so much stuff be done by the AI and I can build an entire company with 100 AI agents and one or two employees. You know what I mean? So, like, I feel like the economy is going to be in for a big shift in some fashion. I'm curious if you've thought through that a little bit or see some of the beginnings of that as ideas for what your students are bringing forward and whatnot. I don't know if you have some thoughts on that.

Speaker B: Uh, well, in some way, if we go back to commons and we bound the notion of a transaction between two humans, which is the current state of affairs now, um, I don't know what happens if we relax that constraint. Uh, you know, because that, that, I mean, this kind of then goes back to basic microeconomic discussions and strategic management discussions on competitive advantage. I mean, for example, if we have two, uh, robots, let's say there's three robots and they can transact with one another. Well, why would, how is competition come to play? Like all our M. Alfred Marshall's models on supply, you know, and demand and all Walrus and all these Ricardi, Nick and all these people that have thought deeply about how humans interact at the aggregate. Three robots that are identical, which robot is the, uh, is one of them gonna choose to do business with? I mean, let's just take drywall distribution. If it's the same product and everybody can deliver the same thing, who do you call? And I would think that the robot would struggle to make a decision there. Uh, maybe they split their order into both robots. So the notion of competition and then the growth, all these things kind of become an interesting question mark when we replicate economics from a human domain to a robotic domain. Maybe we do need to rewrite these books just to understand that other side. And maybe it's already been written. I haven't thought about it.

Speaker A: No, it's, it's interesting thing, like on equal playing grounds. I agree with you. Like, it would be tough for the robot to help decide. It would give you one of those waffling answers that it does so well. Um, but I think, like, I think unfortunately we don't live in that kind of society. We don't live in the world where one robot is going to have an advantage. It's going to get the information faster, it's going to have more compute power, it's going to have more capability than another person's robot. And so I, I do think that the robots with the advantage are going to be able to make the decisions faster and quicker. But it is a interesting, interesting point.

Speaker B: So I would ask to what end then? Right? And then the end, the end of that chain of cause and effects should be consumption, right? Otherwise, uh, these robots are going to be piling, uh, piling up, uh, blue jeans into uh, space and say, hey, we just made a sale, right? And so there has to be a consumption at some point. And you know, and so from that perspective then, you know, the, you know, the future could be very bright, right?

Speaker A: In the sense I certainly think it's going to be. Yeah, I agree.

Speaker B: Everybody has an idea. Everybody has an opportunity to create that idea and, and engage the market from a commercial sense and generate income for themselves with their idea. All they have to do is find enough people from the 8 billion to give them enough, uh, love to be able to, you know, pay for their children's education, which is not impossible, Right?

Speaker A: That's right.

Speaker B: You know, so, so, and it's this very interesting, um, uh, Frank Knight, 1921 19. Uncertainty. Very famous. Uh, and everybody's, there's big topic now, discussion about uncertainty in the core principle in business is that uncertainty is a necessary condition for profits to occur. And it just shifts, right? And so now if we fast forward into the world, the way I see this with AI, is everybody having their little AI, uh, you know, um, uh, entity on their shoulder helping them. It just shifts to a marketing, it's just a marketing uncertainty. And, and will people like this idea? And, and maybe, maybe the ideas are shorter lived because there's going to be another one. Maybe it's not the 30, 50, 100 year old companies anymore.

Speaker A: That's right. So we'll see, we'll see how uh, it, we'll see how that plays out for sure. I mean there's some really, really interesting tension happening in the world right now. Especially like with you. I mean you're the academic who's studying entrepreneurs and how they make these decisions and you're embedded into the Connecticut startup ecosystem, uh, like 1 million cups and some of the other things. Um, I feel like AI is reshaping what entrepreneurship is like. Entrepreneurship's been on the steady decline for 30, 40 years and I'm so certainly hoping that AI is going to turn that and drive it up, up higher again because you can bring your idea to life so much quicker now. I think those barriers are starting to collapse. Um, the barriers to raising money are shifting. Um, so what, what does that really mean for like how you're teaching leadership and entrepreneurship leadership? Um, and what, what should like investors be looking for in the founders of these companies? You're inspiring.

Speaker B: The second one is a tough one. I'll take the first one first.

Speaker A: Okay.

Speaker B: You know, but, but in, in terms of what this means is this could be a very healthy, vibrant economy, right? Because if everybody is having their own idea, all those uh, dollars are, are circulated locally. Uh, that's local taxes, local schools. So I mean it could be cottage industry on steroids here and it could be a massive boom, boom for all states. So now there's no tax incentive for the hundred billion dollar company that comes in here, uh, just to attract jobs. Everybody's got their job. So it could really be the golden age, um, that you know, and, and capitalism, just to kind of put it open up a parenthesis here, capitalism does have its faults and there's a lot of uh, uh, legitimate issues that my students communicate to me with it. I argue however, with this digitalization that the principles of capitalism can really get us out of the situation. That the economies of scale mentality where you have to reduce the marginal, the average cost, uh, you know, the marginal cost to its lowest point, that philosophy is no longer apropos. So um, you know, it could be a very good thing. But so in terms of the, for what the, you know, investors, uh, should do and how they choose, I mean that is a question, a uh, complete question mark. You know, I, I just teach my students, uh, that ultimately they're going to have to stand in front of these people themselves and they're going to speak and uh, I tell them that they're uh, final line of defense, their father, final fallback position, uh, in. Once they walk into that room is the strength of the logic of their analysis.

Speaker A: That's right.

Speaker B: And you know, and there's nothing else beyond that. Right. Because we're, we're thinking about a future that may not exist. You, uh, know, and, and uh, and they're standing up proposing it. And I kind of just remind myself constantly, I'm 46 now. I remind myself I probably walked into that boardroom when I was 25 to 20, you know, 31, let's call it over 100 times. I was terrified every single time, like just butterflies. Like, did I get these numbers wrong? You know, I got all these top brass looking at me. I'm this young kid like, you know, that, that feeling I communicate to them, I'm like, you know, and I, and that's what the whole competition is about, them standing up and getting that experience. In terms, but like in terms of what angel investors should do and focus on, you know, that's a, that's a, that's. That I don't. Indeterminate would be my answer.

Speaker A: Yeah, well, it depends on your investment strategy, I suppose. Like if you're trying to maximize profit or maximize philanthropic endeavors, whatever that is. I guess if I rephrase the question a different way. Right. AI is shifting the power because founders can access information and capability that used to require a whole team. Like how do you think that changes the negotiation dynamic?

Speaker B: Well, that's a very good question.

Speaker A: Yes.

Speaker B: And um, that it does help significantly. However, uh, it goes back to the age old question of a bird in the hand versus two in the bush. Right. Staring another human in the eye who is ready to write a check. Those checks don't come easy. And are you really going to say no? And so now cognitive biases creep in and.

Speaker A: That's right.

Speaker B: And you know, and so when the rubber meets the road, you know, all of that AI stuff evaporates. Maybe it helps you negotiate. Ah, but you're still looking at somebody eye to eye and you have to make that call. It's an interesting position, but to your point, power is completely shifted, of course, but then it could immediately shift right back. Right at that.

Speaker A: Yeah, I agree. I mean you need a lot less money to bring your product to, to fruition, but I think you probably need even more money now to bring it to market. And I think there's a difference. Right. Because you without, like you said, without that other human willing to consume it, then, uh, you don't have. You just built the field of dreams, right? So.

Speaker B: Well, absolutely. And, you know, how about keeping the team together, motivated long enough while if we play this out, if AI is so easy to do, and if everybody has all these ideas, then your team is going to have all these ideas. And so how, you know, the execute, to your point, marketing, execution aspect of that team becomes much more critical. Now, can these group of people just stick around and want to work together long enough?

Speaker A: That's right. That's right. Yeah, exactly. It's, ah, the individualisticness of our society that we're heading towards too. So this has been, uh, an amazing conversation. Aydin, I really appreciate your time today. I'm hearing like this, underneath of all of it, that the fundamentals of entrepreneurship are not changing. You still need this real insight, this real market knowledge, these real relationships with that person across the table. But I do think AI has changed how fast you can get to the moment where those fundamentals are tested. Right to your point, you're doing it in 13 weeks, and that's really fast. Um, but, uh, we're demanding more standards and not lower ones. So, yeah, it's amazing. So how do people connect with you and learn more and reach out and say hello?

Speaker B: Well, I'm at the University of Hartford. Um, and, uh, there's a website there you can Google me. I must admit that I have my head down. I'm, uh, the tenure track. I'm at the lowest point in the totem pole trying to get to, you know, become a professor. Just an assistant here. So, m. Not a lot of time, but happy to chat, you know, you know, and. But, you know, the world. Take mercy, please.

Speaker A: That's right. That's right. Absolutely. Well, I will make sure that we pop a couple of those links in the show notes. So if you want to reach out and say hello. Um, and again, thank you, Aydin, for being here. Really appreciate your time.

Speaker B: Thank you for this. This is wonderful. I'm delighted to have done this.

Speaker A: Thank you again to everybody out there. If you're a founder preparing to raise money or an investor trying to make better decisions, or maybe you're an entrepreneur trying to figure out how AI is fitting into your strategy. Share this episode because I think, uh, we unpack some amazing bits of entrepreneurship here. Um, this is a conversation that I think goes deeper than a pitch deck. So follow the podcast. If you aren't currently following it, leave us a review and check out all the ways to connect with Aydin down in the show notes again. I'm, um, Brian Dunstead. You have been listening to AI With Bri. And remember, the future doesn't wait. So learn, Leverage and lead, and we'll see you next week. This episode of AI With Bry was hosted by and produced by me, Brian Denstett. Produced with help from Nancy Velasquez and Kelly Lopez. Video by leo moralina. Sound AI generated. Find us on all platforms at AI with Bry and visit AI bri.net for more. Learn, leverage, Lead.