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The Rise of AI in Asset Management

Feb 20, 2018

The integration of artificial intelligence into asset management is a rising trend that has gained traction among various elite investment firms. Machine learning offers investment managers the potential to filter and analyze data at a more granular level than was previously imaginable. This may be a contributing factor as to why some of the most prominent investment groups, such as BlackRock, have begun to increase their exposure to the field. As discussed in a Financial Times article titled “BlackRock bulks up research into artificial intelligence” written by Robin Wigglesworth, BlackRock is weaving artificial intelligence into its operations as a supplement to their current investment teams.

Many investment management firms have gained the reputation of being archaic, often relying heavily on manual fundamental and technical analysis to make decisions. Many of these professionals fail to capitalize on the astronomical wealth creation capabilities offered by advanced artificial intelligence and machine learning. An increase in AI sophistication as well as utility has begun to revolutionize the way in which many previously outdated companies operate. Many early moving investment firms that were quick to integrate machine learning into their operations are producing returns that are difficult for more traditional firms to overlook.

There has been hesitancy on the part of some investment managers to turn their operations over to advanced computer systems. This may be based in either a fear of their own obsolescence, a distrust of technology to capitalize on “gut instinct” investment decisions, or simply a lack of understanding of how these systems operate. Whatever the case may be, a widespread shift towards artificial intelligence in the investment process has gained momentum.

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