AI gaining acceptance in asset management, wealth advisory

MORE financial institutions are integrating artificial intelligence (AI) into their operations as the technology matures and the companies seek to reduce their costs.

AI is now being used both for internal processes as well as for investment decisions, industry players said.

“I think there’s a huge amount of learning from top to bottom in the organisation, not just on how to use AI, but also what the opportunities are and how to use it effectively,” said Marion Leslie, head of financial information at market infrastructure provider Six Group.

Six’s recent survey of 343 international financial institutions found that nearly half of them (48 per cent) planned to focus on integrating AI in the next three years.

While AI as a technology has been around for decades, Leslie said that generative AI technology has “shifted the priority” in people’s minds. “I think there is an easier adoption of some of these (AI) things, and sometimes, a fearlessness about it.”

Leslie noted that AI could “short-cut” the work of business analysts by studying patterns in data, freeing up analysts to focus on relevant areas.

AI can also be used to improve understanding of customer behaviour or to help companies manage their databases of information more efficiently, she added.

Pang Zheng Rong, deputy head of technology at wealth advisory firm Providend, said that it is not surprising that AI has become a technology priority and growth enabler.

“This is especially true with Asian markets such as Singapore, where costs are rising and talent is scarce. With AI, companies can process vast amounts of data faster and more smartly – allowing the key stakeholders to derive insights and streamline processes,” explained Pang.

Providend plans to use AI to help with investment research, optimise processes and improve client experience.

Deanna Seow, executive director at investment manager Rainforest Research, said that AI can be “a great help” in shortening the time required to process large amounts of data ranging from market prices to geopolitical developments.

There are challenges to the use of AI, of course.

Seow said that AI could generate suboptimal decisions or results, especially if the technology is not fully developed.

Pang of Providend also noted a need for skilled talent to implement and manage AI systems.