Geneva Insights June 2025

Executive Summary

The first half of 2025 has brought significant AI developments that directly impact Asset & Wealth Management operations. From DeepSeek’s democratization of frontier AI capabilities to Claude 4’s advanced reasoning features, the landscape is evolving rapidly with clear implications for efficiency, cost management, and competitive positioning.

However, the most pressing issue for European wealth management professionals may not be the latest model releases, but a critical data protection challenge hiding in plain sight. A recent US court order requires OpenAI to retain user data even when deletion is requested – creating compliance risks for Swiss and EU firms whose business partners may unknowingly expose client information through their ChatGPT usage.

Recent AI Developments: Your H1 2025 Calendar

Here are the key AI milestones that matter for Asset & Wealth Management:

Data Protection Alert: Is Your Business Partner Exposing Your Client Data?

Recently I was sitting on a Léman Express next to a man in suit with his laptop. Between Genève Cornavin and Lancy-Pont-Rouge, he was switching multiple times copy and pasting content between his outlook and a ChatGPT window. Two questions immediately came to mind: 1) Are his business partners aware that everything they email to this person will be directly pasted into ChatGPT? and 2) How does he actually use ChatGPT: Enterprise Grade, Pro or Free version?

Why this matters: If he uses free ChatGPT, potentially all of his business partner’s communication will end up being trained on OpenAI’s model. If it is Pro and he has successfully opted out from being trained on, still the communication may be saved in the US due to the most recent lawsuits between OpenAI and US courts.

The Critical Distinction: Service Tiers Matter

On May 13, 2025, Judge Ona T. Wang issued an order requiring OpenAI to preserve and segregate all output log data, specifically identified as “ChatGPT chat data”. However, the impact depends entirely on which OpenAI service is being used:

Protected Services (NOT impacted by US court order)

• ChatGPT Enterprise, Edu
• API with Zero Data Retention (ZDR)

Exposed Services (Data WILL be retained due to court order)

• ChatGPT Free, Plus, Pro, Team
• Standard OpenAI API without ZDR

Swiss AWM Compliance Implications

For Swiss and European wealth managers, this creates a transatlantic data dilemma. The core conflict lies in the fundamental incompatibility between US discovery rules and European data protection laws. GDPR Article 48 prohibits reliance on third-country court or administrative orders as a basis for personal data processing unless pursuant to an international agreement. No such agreement currently exists between the US and EU.

FINMA’s Perspective: Approximately 50% of Swiss financial institutions are using AI, with 91% of those utilizing generative AI. FINMA adheres to the principle of “same business, same risks, same rules”.

Practical Recommendations

• Audit Your Vendors: Ask every business partner and vendor which OpenAI service tier they use
• Contractual Safeguards: Ensure Data Processing Agreements (DPAs) explicitly address cross-border data transfers and conflicting legal obligations
• Client Communication: Consider informing clients if their data might be processed through AI tools
• Enterprise-Grade Only: For sensitive client data, insist on ChatGPT Enterprise or API with ZDR, or simply consider alternative options to using ChatGPT

Looking Ahead

This is the first edition of our monthly AI x Wealth Management – Geneva Insights. Your feedback shapes our focus for the next newsletter episodes:

Which topics would most benefit your practice? Recent regulatory developments? Practical implementation challenges? Vendor evaluation frameworks?

Share your thoughts in the comments or connect with us directly via private message on LinkedIn. In an industry built on relationships, the best insights come from real conversations with practitioners facing similar challenges.

Sources:

1. Federal magistrate judge directs OpenAI to preserve output log data
2. OpenAI and the cross-border data dilemma: US litigation holds vs GDPR erasure obligations
3. FINMA survey: artificial intelligence gaining traction at Swiss financial institutions

About the Author: Dr. Andreas K. Janoschek specializes in AI applications for Asset & Wealth Management. Based in Geneva, he helps industry professionals navigate at the intersection of finance and technology.

This newsletter aims to inform and does not constitute investment or legal advice. Always consult with qualified professionals for specific circumstances.