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ARTIFICIAL INTELLIGENCE

Artificial Intelligence (AI) is already here. AI is no longer the stuff of science fiction.

 

AI is advancing so quickly that that you don’t have the luxury of sitting back and waiting to see what happens. If you do, it will be too late. Most agree that the technology is evolving extremely fast.

 

The operating environment for funds management firms worldwide continues to undergo sustained transformation. Limited organic growth, volatile capital market returns, and fee and margin compression have created a more challenging context. In this shifting paradigm, technology continues to play a critical role in enabling rapid business transformation, as well as driving opportunities for efficiencies, innovation, and value creation.

 

The take-up by major funds managers had been rapid but generally still in its infancy.

 

Impact of AI

AI is a disruptive and increasing powerful technology. Some say that its impact on society and the economy will be as great as the industry revolution. That maybe, but it would be hard to find futurist who doesn’t think that the impact of AI will be profound and as significant as the revolutions caused by computer chips and the Personal Computer as well as inventions such as the television the internet and mobile phones.

 

It is too early to predict with a high degree of confidence how and how much it will impact on the world economy.

 

What is known with certainty is that AI works 24/7 365 days a year for nothing. AI doesn’t come with the baggage that humans do. AI doesn’t take sick leave, or maternity leave or annual holidays. AI never complains and doesn’t play office politics. AI won’t stab you in the back and always does what you ask it to do without moaning about it.

 

The main point is that don’t have to pay AI a salary package. Which is why companies will replace humans with AI as soon as they can. Just as robots replaced humans on car production lines, AI will replace humans in many ‘white collar’ jobs especially those that involve repetition.

 

GENERALLY AGREED IMPACTS

  • AI will change to way we work and the types of jobs that are available to humans.

 

 

  • AL will improve productivity and boost economic growth as more and more companies use it in their business operations.

 

 

  • Many jobs will go others will be created.

 

 

  • Jobs that require “uniquely human skills” are less likely to be vulnerable to disruption.

 

IMPACT OF AI ON FUNDS MANAGEMENT

Not all funds managers are the same. So the impact of AI will vary between managers.

 

We forecast 8 areas that the impact of AI will be profound:

 

Middle and Back Office

  1. Jobs with a lot of repetition will be reduced as automation will improve efficiencies and drive cost reduction. For example, Administration and clerical jobs, compliance, accounting, IT, settlements, customer service human resources, marketing and payroll.

 

 

  1. There will be more jobs in niche parts of IT as developing AI programs.

 

 

  1. There will be different jobs in risk management. AI equips firms with the tools to bolster compliance and risk management functions, augment and automate data analysis, and anticipate and manage ambiguous events.

 

Front Office

 

  1. Different types of marketing professionals will be required. The need for copywriters will be reduced as will the number of market researchers. The need for strategic marketers will increase as will behavioural experts. AI already is helping advisors to generate more insights, customize content more effectively, and deliver it to clients with greater agility and speed.

 

 

  1. Generating investment competitive returns.

 

 

  1. Fewer investment team members. AI already improves the productivity of investment analyst and portfolio managers. AI will analyze company financials and reports, industry data, share broker reports and generate a company report at a fraction of the time taken today.

 

 

  1. Automation is likely to see the demise of the role of dealer / trader. There will be much fewer decision-making mistakes with advanced AI which is already being used in high frequency trading.

 

 

  1. Fewer management reports to read. AI can create executive summaries that are tailored to an individual needs, creating time for more important things like strategic thinking, engaging with customers and staff.

 

In summary, AI will help you make better investment decisions, provide better advice, automate many support functions, improve efficiencies, lower costs and increase profits.

 

AI offers the opportunity of attaining a sustainable competitive advantage. For those businesses who are relatively heavy with costs, AI offers a inexpensive way catching up and exceeding the efficiencies of the leaders.

 

HOW WE CAN HELP

In summary, AI will help you make better investment decisions, provide better advice, automate many support functions, improve efficiencies, lower costs and increase profits.

 

AI offers the opportunity of attaining a sustainable competitive advantage. For those businesses who are relatively heavy with costs, AI offers a inexpensive way catching up and exceeding the efficiencies of the leaders.

 

The benefit of using our consulting services is that we have hands on experience in front, meddle and back office functions. We under stand the role of each person in your firm. We understand how different teams interact with each other and their role within the firm. We understand the roles of your service providers within your firm.

 

This enables us to spot opportunities in your business to use AI effectively with little risk of creating new problems.

 

Where to start

  1. Business Strategy After conducting a SWAT analysis or similar, define your business strategy.

 

 

  1. AI Strategy Decide the areas AI could be utilised as part of your business model. (You will need to evaluate implications from a risk perspective).

 

 

  1. Execution Strategy Determine the way forward. We recommend a ‘pilot, prove and scale’ approach, because it can rapidly demonstrate the potential for value creation.

 

 

  1. Focus on short-term value and quick wins Doing so will encourage a long term commitment to continuous efficiency improvements.

 

 

Intrinsic can help you with 1, 2, 3 and 4, above.

 

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