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Fund managers tentatively roll out AI technology
ASSET MANAGER PANELLISTS AT FUND FORUM HAVE SEEN A CHANGE IN MINDSETS TOWARDS AI, BUT REMAIN WARY ABOUT FULL-SCALE ADOPTION.
Financial services – including fund management – are increasingly embracing artificial intelligence( AI) and robotics as staff become more comfortable with using the technology, but the industry needs to temper its expectations around projected cost savings, according to a panel of experts, speaking at Fund Forum International in Berlin.
AI is generating enormous interest across financial services as margin-constrained businesses look to contain costs and curtail spending on repeat processes which do not contribute to the bottom line, such as regulatory reporting. AI tools like RPA( robotic process automation) also help expedite the time it takes to complete repetitive tasks, doing so with a far higher degree of accuracy than any human intermediary ever could. Implementing an AI solution is not without its challenges though and employee concerns about job security need to be addressed.“ Robots are seen by staff as a threat as repeat tasks are effectively being removed. Nonetheless, attitudes are changing as people now recognise the technology brings about opportunities. We have certainly seen a change in mindsets,” said Edward Wierenga, head of business implementation at NN Investment Partners. Wierenga acknowledged that compiling bespoke client reports – which on average can take up to four days to complete using existing systems and technology – could be concluded in minutes via AI enabled software bringing massive efficiencies internally. As a consequence, staff who would have normally been saddled with mundane project work can focus their resources on more interesting work. Simultaneously, clients are also likely to benefit as they will receive AI generated reports in much better time than what they would done have before.“ Robotics does introduce speed and reliability, but it is not a free lunch. Humans add common sense to an equation. A robot, for example, flipping burgers will not be able to assess if it is frying proper meat, as it will cook whatever is given to it,” commented Niall Bellabarba of Elinvar. As such, a human overlay is necessitated to ensure the data being provided to AI software is of sufficient quality otherwise it could result in firms making serious mistakes. While AI brings a number of advantages such as business efficiencies and heightened security, implementing the technology does not facilitate immediate cost savings as it introduces added overheads, said Arnaud Misset, chief digital officer at Caceis. Lorna Martyn, head of technology at Fidelity Investments, agreed.“ AI has with it licensing costs. There is also an ethical dimension to AI. If customers are dealing with AI technology, it needs to be made very clear to them that they are interacting with a robot and not a person,” she said.
$ 20 billion
McKinsey highlighted this year that robotics and automation could generate $ 20 billion in savings across the securities services industry.
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