Over the past few weeks, MDOTM research team has gone through top publications, survey reports, and insights for the AI investments lansdcape in 2024. As we stand on the beginning of this new year, we find ourselves at a turn point. How is the industry navigating these times, and what role does technology truly play in this narrative?
This article seeks to help executives cut through the noise and comprehend the fundamental changes the industry is undergoing. The following are some key insights we collected.
AI Outlook In Investments: Optimism Now & In The Future
The 2023 Financial Services GenAI Survey by Ernst & Young LLP (EY US) highlights the overwhelmingly positive stance of financial services leaders toward the adoption of artificial intelligence. Key positive findings include:
- Universal AI Adoption: Nearly all (99%) of the financial services leaders surveyed reported that their organizations were deploying artificial intelligence in some manner, and all respondents said they are either already using, or planning to use, generative AI (GenAI) specifically within their organization.
- Optimistic Outlook: More than half (55%) of respondents expressed support and optimism about using AI, while an impressive 77% viewed GenAI as a beneficial force for the financial services industry in the next 5-10 years.
- Long-Term Benefits: The long-term sentiment is even more optimistic, with 77% of executives viewing GenAI as an overall benefit to the financial services industry in the next 5-10 years. Leaders see a particular opportunity in customer and client experience, with 87% stating that they believe AI can bring improvements to this space.
- Top Benefits of AI Implementation: Leaders identified key benefits, with 46% citing risk reduction from data processing, 38% mentioning the creation of new offerings and hyper-personalized offers, and 37% highlighting improvements in data management processes and accuracy.
The Value-Add Of AI For Wealth & Asset Managers (in $ Billions)
In addition to these findings, a recent report of McKinsey highlights that AI, especially Generative AI, hugely benefits Asset & Wealth Managers. In fact, an increasing number of managers and wealth managers view this new technology as a driver to move beyond the traditional approach, which relies on standard client profiling.
Instead, they are leveraging this technology to customize portfolios for each client, blending subjective and objective parameters. Notably, this customization is one of the areas where technology is accelerating the shift from using model portfolios frequently to adopting a more modern and flexible approach. With the aid of new software and AI platforms, it's now possible to construct investment portfolios on a large scale and adjust positioning, rebalance, and manage risks in real-time based on specific client preferences and market insights.
A recent Deloitte report also states that GenAI has made professionals 30% to 40% more productive, and we can clearly see how this resonates to the investment industry, where Generative AI plays a pivotal role in creating streamlined summaries and reports on portfolio performance that provide users with a comprehensive understanding of these analytical outputs.
Watch the video to better understand the difference between Analytical & Generative AI in investments and how we leverage them in our AI platform Sphere👇
In summary, these insights showcase a predominantly positive sentiment toward AI in financial services, with a strong belief in its potential benefits, particularly in enhancing customer experiences and driving long-term industry advancements.
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