Many regard asset management as a traditional industry, reluctant to innovate and adapt to new technology. But this is changing.
Enter Artificial Intelligence that provides clearer market insights, Big Data tools to analyze huge chunks of market data and evaluate risks and opportunities, and Blockchain for regulatory compliance.
These three technology trends in asset management are boosting automation of functions such as risk assessment, market research and analysis, and asset trading.
1. Big data
Effective delivery of asset management services such as mutual fund management, equity management, or fixed asset management requires access to analysis of large volumes of data. Thus, it makes sense for asset management agencies to incorporate big data analytics into their decision-making processes.
Big data tools can analyze huge chunks of market data and evaluate risks and opportunities associated with different assets. Asset management software programs driven by big data analytics are gaining popularity among asset and wealth management companies.
2. Artificial intelligence
AI, fueled by big data, provides descriptive market insights and recommends actions for the future to maximize return on investment.
AI can evaluate investment options by measuring the environmental, social, and governance (ESG) score of companies, acting as an indicator of their long-term sustainability. AI can also act as a robo-advisor, providing clients with investment advice without human intervention.
3. Blockchain
Blockchain helps to ensure regulatory compliance. It is becoming synonymous with privacy and involves maintaining private, secure records, such as client information. It can also be used to speed up transactions involved while trading or liquidating assets such as stocks and commodities.
Technologies like AI, powered by big data and secured by blockchain, will no doubt be more effective at making asset
management decisions and executing them. But, functions like devising a long-term strategy, complex decisions, and governing the technology require human input.
What Technology is Not!
Technology supports asset managers in the decision-making process, primarily by organizing up-to-date and critical data
on portfolios. However, technology does not tell investment professionals what to do. It does not recommend the optimal level of risk in a portfolio. Rather, technology helps investment professionals measure their risks relative to the risk and return objectives specified by clients.
Read the full article: These 3 technologies are readily waiting to help you with asset management
THE ROLE OF TECHNOLOGY
WITHIN ASSET MANAGEMENT – Click on the image below.
