Artificial Intelligence (AI) technology has become increasingly complex and can now assist in trading less liquid assets. As machine-assisted learning develops beyond trading, it offers portfolios relief from the behavioural biases humans are prone to displaying which can lead to significant information oversight.
It is suspected that as this technology progresses, asset managers will invest less in company-wide human capital and more into AI engineers and data scientists. Some claim that there will be more technology and data-driven roles available that those requiring experience in financial markets.
However, human intuition is still an invaluable element to the investment decision-making process, as fund managers can take into account the impact of wider economic and geopolitical events. This, along with some volatility in AI-managed funds means that an AI-driven future is still yet to come, even if inevitable.
The asset management industry begun to recognise, perhaps belatedly in some cases, that it is likely to be massively disrupted by the introduction of artificial intelligence. It is estimated that algorithms now account for 90% of financial market trading. Yet there are only a few managed funds that are fully using machine-learning technology. There are plenty of funds using artificial intelligence (AI) to churn out ideas, or refine their trading signals, but the exposure they take and the way they execute trades is still controlled by the human fund manager. The next wave of funds is set to radically disrupt the industry. Progress with machine-learning algorithms, especially through the development of deep learning techniques, is producing a new wave of managed funds that are robotically controlled in the analysis, security selection and trading processes.