From Brokers to Bots: How AI Is Reshaping Asset Management

From Brokers to Bots: How AI Is Reshaping Asset Management

Time Stamp: August 14, 2023 7:00 AM
From Brokers to Bots: How AI Is Reshaping Asset Management PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Artificial Intelligence (AI) has emerged as a powerful tool for managing complex and dynamic
systems and has solidly integrated itself into the financial services industry, asset management
in particular. As the technology develops, it is increasingly being harnessed to streamline,
automate, and optimise asset management, making it smarter, more efficient, and cost-effective.

AI could increasingly become indispensable due to the enormous volumes of data
involved and the high stakes we face when trading the financial markets. The global market size
for AI in asset management was valued at USD 2.61 billion in 2022 and is expected to grow 24.5% annually from 2023 to 2030.

A Wider Spectrum of Possibilities

The financial services industry as a whole and the asset management field, in particular, are
seeing significant uses for AI. This is thanks to its capacity to process large volumes of data faster
and more accurately than was previously ever possible.

AI systems can now monitor asset
performance and market direction in real time in order to escalate potential issues or engage
directly with the market to balance clients’ portfolios. Such capabilities could help tremendously
in managing risks for clients and improve operations as it is estimated that AI could increase
productivity 13.8%, AUM 8.1%, and revenue 7.7% for asset management firms that
adopt it.

Data processing, sentiment analysis, and predictive analysis are important fields of development
for AI in finance as they can facilitate performance-based services and improve decision-making.

Systems like robo-advisors are increasingly popular as they provide automated,
algorithm-driven financial planning services with little to no human supervision. They analyse
market trends, historical data, and investor risk profiles to create personalised investment
strategies, offering a more affordable, accessible, and efficient alternative to traditional human
advisors.

Leveraging AI to Improve Its Value Proposition

Due to its numerous advantages, we use artificial intelligence to manage part of our operations,
in particular in regard to interfacing with financial markets, portfolio management, and risk
management.

Our systems are used to monitor the market for relevant signals/events and
generate relevant alerts for us to handle. This helps us keep track of the different markets we
are investing in without having to manually monitor them all at all times. Removing this tedious
process enables us to concentrate on the part that provides the highest value to our clients,
which is our strategy.

Our alert generation system triggers rebalancing operations of our clients’ portfolios. Alerts can
also suggest investment opportunities that are evaluated by our team. A significant part of our
asset management process is handled by humans to ensure that clients’ portfolios are securely
handled and to enforce the coherence of our trading strategy.

Upon our green light, automated
systems take over to execute the necessary trades and distribute assets in a balanced way
across managed portfolios. This process exposes our clients’ portfolios to the performance of different asset classes from
forex to stocks, metals, and others covering various regions around the globe in order to
maximise profits and limit risks.

What Lies Ahead for AI

While AI’s rapid progress and its growing capabilities could increasingly replace humans for
various tasks, the human touch remains important for us as we provide expertise and
strategy at the backend. AI systems are also error prone and require human verification in
particular in our field where large sums of capital are at play.

Other challenges remain around
data privacy, data quality and the underlying algorithms among other things to establish a safe,
reliable and secure infrastructure for an AI to provide a strong performance.

Moreover, as AI takes on more responsibilities, the need for transparency and explainability in
its decision-making processes has become paramount. These could be critical factors for a more in-depth adoption of the technology in the financial industry as a whole to ensure its credibility.

Overall, we could see a rapid increase in the use of AI in various financial markets in general
and asset management and trading in the future. The forex market could be particularly
promising for the technology due to its sheer size, large trading volumes, geographical
reach, and trading hours.

AI Augments Humans

Human capacity remains limited and AI can help in this regard. AI remains a tool that has to be
well understood to be used to its fullest capacity in an efficient and secure manner. We believe
that AI can help leverage our expertise in asset management and help us provide better
performances for our clients.

As we navigate through the challenges and refine the technology,
the role of AI in asset management will undoubtedly continue to grow in light of the
tremendous size of the assets under management globally, valued at USD 98 trillion in 2022.

Artificial Intelligence (AI) has emerged as a powerful tool for managing complex and dynamic
systems and has solidly integrated itself into the financial services industry, asset management
in particular. As the technology develops, it is increasingly being harnessed to streamline,
automate, and optimise asset management, making it smarter, more efficient, and cost-effective.

AI could increasingly become indispensable due to the enormous volumes of data
involved and the high stakes we face when trading the financial markets. The global market size
for AI in asset management was valued at USD 2.61 billion in 2022 and is expected to grow 24.5% annually from 2023 to 2030.

A Wider Spectrum of Possibilities

The financial services industry as a whole and the asset management field, in particular, are
seeing significant uses for AI. This is thanks to its capacity to process large volumes of data faster
and more accurately than was previously ever possible.

AI systems can now monitor asset
performance and market direction in real time in order to escalate potential issues or engage
directly with the market to balance clients’ portfolios. Such capabilities could help tremendously
in managing risks for clients and improve operations as it is estimated that AI could increase
productivity 13.8%, AUM 8.1%, and revenue 7.7% for asset management firms that
adopt it.

Data processing, sentiment analysis, and predictive analysis are important fields of development
for AI in finance as they can facilitate performance-based services and improve decision-making.

Systems like robo-advisors are increasingly popular as they provide automated,
algorithm-driven financial planning services with little to no human supervision. They analyse
market trends, historical data, and investor risk profiles to create personalised investment
strategies, offering a more affordable, accessible, and efficient alternative to traditional human
advisors.

Leveraging AI to Improve Its Value Proposition

Due to its numerous advantages, we use artificial intelligence to manage part of our operations,
in particular in regard to interfacing with financial markets, portfolio management, and risk
management.

Our systems are used to monitor the market for relevant signals/events and
generate relevant alerts for us to handle. This helps us keep track of the different markets we
are investing in without having to manually monitor them all at all times. Removing this tedious
process enables us to concentrate on the part that provides the highest value to our clients,
which is our strategy.

Our alert generation system triggers rebalancing operations of our clients’ portfolios. Alerts can
also suggest investment opportunities that are evaluated by our team. A significant part of our
asset management process is handled by humans to ensure that clients’ portfolios are securely
handled and to enforce the coherence of our trading strategy.

Upon our green light, automated
systems take over to execute the necessary trades and distribute assets in a balanced way
across managed portfolios. This process exposes our clients’ portfolios to the performance of different asset classes from
forex to stocks, metals, and others covering various regions around the globe in order to
maximise profits and limit risks.

What Lies Ahead for AI

While AI’s rapid progress and its growing capabilities could increasingly replace humans for
various tasks, the human touch remains important for us as we provide expertise and
strategy at the backend. AI systems are also error prone and require human verification in
particular in our field where large sums of capital are at play.

Other challenges remain around
data privacy, data quality and the underlying algorithms among other things to establish a safe,
reliable and secure infrastructure for an AI to provide a strong performance.

Moreover, as AI takes on more responsibilities, the need for transparency and explainability in
its decision-making processes has become paramount. These could be critical factors for a more in-depth adoption of the technology in the financial industry as a whole to ensure its credibility.

Overall, we could see a rapid increase in the use of AI in various financial markets in general
and asset management and trading in the future. The forex market could be particularly
promising for the technology due to its sheer size, large trading volumes, geographical
reach, and trading hours.

AI Augments Humans

Human capacity remains limited and AI can help in this regard. AI remains a tool that has to be
well understood to be used to its fullest capacity in an efficient and secure manner. We believe
that AI can help leverage our expertise in asset management and help us provide better
performances for our clients.

As we navigate through the challenges and refine the technology,
the role of AI in asset management will undoubtedly continue to grow in light of the
tremendous size of the assets under management globally, valued at USD 98 trillion in 2022.

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