We all know the asset management business is going through a massive change, some good and some bad, but the biggest is embracing AI (artificial intelligence). Seems there is an AI race to gear up or fade out. Digitalization is making firms more efficient, lowering costs (and fees……meaning advisor’s incomes) and more and more, driving fund management & investment decisions with algorithms (aka robots). So, here is some great insight to see what’s coming.
“The more than 1,800 attendees who flocked to this week’s FundForum International summit in Berlin could not escape the keen focus on digitalization and the growing pressure on managers to harness its anticipated benefits.
Given the tremendous potential for artificial intelligence (AI) to improve systemic efficiency and optimize client communications, the pervading sentiment was very much “adapt or die”.
Swiss fund house Unigestion has incorporated machine learning techniques into its systems since 1995 and views its embrace of digital as a continual work-in-progress.
The latest focus is on machine learning skills which learn from the market rather than humans, according to its Chief Executive Officer (CEO) Fiona Frick, speaking to CNBC on Monday.
“The idea will be more to ask the machine a question and see what the machine will answer rather than tell the machine what to do,” explained Frick, asserting that this methodology will be the next stage of the relationship between man and machine in asset management.
As fund houses strive to dismantle punitive legacy cost structures at a time when fees are being decimated, Lawrence Wintermeyer, CEO of U.K. fintech association Innovate Finance, told CNBC that the potential for active managers in particular to improve on their sums is substantial if they can augment their decision making with AI.
“That extends not just into helping deliver better alpha or better investment returns but how to give better oversight of compliance – that’s called RegTech – and drive down compliance and oversight costs. I’d watch that space,” he advised.
The asset management industry is still playing digital catch-up, according to Jamie Hammond, European CEO of Alliance Bernstein, speaking to CNBC in Berlin on Tuesday…”