AI in Asset Management

AI in Asset Management

Advancements in technology have brought about a change in the equipments and tools being used in most workplaces. If you take a tour of a hedge fund or an asset management company, you will witness new and sophisticated technology that you didn’t know about 10 years ago.

In some companies, trade still take place in conventional ways. The traders make decisions for the investors by observing any changes on their screens. If they find a good investment opportunity, they call up a reliable bank counterparty and realize the investment.

However, in the most advanced firms, the whole process has been digitalized. From portfolio management to order management and finalizing the trade, everything is done electronically. Machines have taken over from humans for this particular function.

Automated Trading

Over the years, the investment industry has been successfully incorporating artificial intelligence for their benefit. It has lead to an increase in automated trading by companies across the sector. Artificial Intelligence (AI) has enabled portfolio managers to make improved and quick decisions that have helped them in faster trades. The process of making a trade happen has shortened significantly and investment opportunities come and go by the blink of an eye.

AI and machine learning systems together have helped both investors and managers. These tools ensure that the decisions being made are informed by data rather than the gut. The new methodologies have been welcomed by investment companies and have taken over conventional methods. It is expected that all companies will be moving towards the advancements these technologies have to offer.

The views on the use of AI and machine learning have been positive throughout the investment industry. It has helped portfolio managers to perform better and reduce mistakes. Many high risk trades are also realizing higher returns. AI has offered the automation of the industry and reduces the number of repetitive tasks. Previously, the managers had to perform the same tasks over again manually. However, AI does everything for them now and suggests the best possible deals for the investors. Thanks to machine learning, all of this is being done within seconds in front of you.

Automated trade is not something new. We have been witnessing its performance for some time. Investment banks have been making the use of it for years now. Investment banks have large pools of data and they deal with it on a daily basis. There are various algorithmic tools being used to ease the work of managers. They set pre-determined criteria for any trade to realize. If the opportunity fulfills the criteria set by the manager, the trade is then concluded after confirmation. This has had a cost-saving and time-saving impact on investment banks’ operations. Traders rely more on the results from using smart algorithms, instead of human reactions.