Adoption of emerging technologies is low among institutional investors despite the belief among nearly three quarters of those surveyed that artificial intelligence (AI) and other forms will transform the industry by 2025.
New technologies are expected to make decision-making faster and more accurate and efficient, a survey of 905 institutional investors globally by Fidelity Institutional Asset Management revealed.
Some 80% believe that blockchain and similar technology will change the industry while 62% of respondents said trading algorithms and quantitative models will make markets more efficient.
However, only one in ten had fully integrated artificial intelligence into their investment processes, with the majority (66%) currently not using AI capabilities.
Paras Anand, head of asset management of the Asia Pacific region at Fidelity International, said: “Technology continues to evolve at a rapid pace, bringing vast and accessible new sources of data to investment teams. The implications for asset allocation and portfolio construction will be profound and in many cases, positively transformative for the industry.”
However, following new data sources or algorithms should not be done on autopilot, he said. “Artificial intelligence is not capable to make investment decisions alone and more data can simply give way to the risk of mistaking mere noise for valuable insight,” said Anand. “But if carefully considered investors can embrace AI to enhance their process.”
Many investors are expecting to increasingly rely on AI capabilities in the not too distant future. The reasons include optimising asset allocation (69%), monitoring and evaluating manager/portfolio performance and risk (67%), and creating custom portfolios without asset manager assistance (39%).
Fidelity’s survey covered investors in 25 countries with $29 trillion (€25 trillion) of assets under management.
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