Morgan Stanley is looking to the strong merger and acquisition market as an opportunity to launch tech-driven tools that help its bankers and advisers make decisions. 

The wealth management company wants to use tech to help its bankers take advantage of the M&A wave, Chief Financial Officer Sharon Yeshaya said during the bank’s first-quarter earnings call today.

“We’ve been giving technological tools to our advisers and investing in the business,” Yeshaya said. “We’re thinking about our resources efficiently and durably as we move forward through the [M&A] cycle.”  

Read more: Banks, fintechs bank in the M&A game 

BIGGER PICTURE: Morgan Stanley is enhancing its adviser toolkit as it enters “the early innings of a multiyear M&A cycle,” Chief Executive Ted Pick said during the earnings call, noting that the company can boost its revenue through underwriting and deal-making.  

Morgan Stanley in September 2023 rolled out AI-driven MS Assistant to its financial advisers, giving them access to a database of about 100,000 research reports and documents, Jeff McMillan, head of firmwide AI, told Bank Automation News. 

Additionally, in the coming months, the institution plans to roll out the Morgan Stanley Debrief tool, an AI tool that can take notes on an adviser’s behalf in meetings with clients, summarize key discussion topics and capture action items, McMillan said. 

Morgan Stanley is poised to gain greater return on investment from growth in alternative assets, including AI, compared to its peers, according to an April 3 Bank of America Securities report. 

BY THE NUMBERS: In Q1, Morgan Stanley reported: 

• Net revenue of $15.1 billion, up 4.1% year over year; 
• Noncompensation expense, which includes tech spend, of $4 billion, down 2% YoY; and 
• Headcount of 79,610, down 3% YoY. 

NOTEWORTHY: Morgan Stanley appointed McMillan to the AI position to develop and deploy the technology within the organization. 

McMillan will be responsible for developing AI-driven partnerships and identifying areas for AI deployment, he added. 

Other FIs are also beefing up their AI leadership teams to take advantage of the tech. 

The $475 billion Capital One appointed Prem Natarajan in 2023 as its chief scientist and head of enterprise AI to lead the bank’s AI development and deployment efforts.  

FORWARD LOOK: To improve its efficiency, Morgan Stanley is looking to consolidate expenses by merging business operations, Pick said. 

“Efforts are evident by the year-over-year reduction in professional services, marketing and business development spend,” Yeshaya said. “Lower legal expenses further supported the improvement in efficiency ratio.” 

The $209 billion New York based-Morgan Stanley reported an efficiency ratio of 71% in the first quarter compared to 72% last year. 

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