In this report, CFA Institute examined issues related to the adoption of AI and big data in the investment process and proposed solutions to resolve them based on best industry practices.
“The investment community is keen to tap AI and big data’s potential to deliver on Fintech’s promise -- combining ‘Fin’ with ‘Tech’ driven solutions to take the industry to the next level,” said Larry Cao, senior director, Industry Research, CFA Institute. “We subscribe to the power of the “AI + HI” (Human Intelligence) model, and see that successful firms will be centered on T-shaped teams that combine investment expertise, innovation and technology applications across investment strategies or processes.”
According to the report, progress in deploying AI and big data has been slow despite management’s enthusiasm. A survey cited in the report shows a clear disconnect between AI plans and use. Based on the survey, only 10% of the portfolio managers who responded to the survey used AI/ ML techniques to improve their investment process in the past 12 months.
“The way forward for investment professionals is to adapt and be conversant with the new technologies,” Cao explained. “Successful investment professionals in the future will be able to work efficiently with data scientists on their teams – while not needing to become data scientists themselves. It takes time to develop and adopt AI and big data applications, which makes it a compelling reason for all aspiring investment firms to act today.”