The writer is former global head of public credit at Aviva Investors
There is so much hype about AI’s potential to transform industries by boosting efficiency and productivity, reviving lacklustre economic growth as the internet did a generation ago. Some of this is coming from those who work in asset management, but others should also look closely at the impact on their own industry. It is likely to be greater than — and different to — what many expect.
In traditional asset management, the need for AI transformation is particularly urgent. Managers have been under margin pressure for some time, exacerbated by the rise of low-cost passive investing. They must prove their abilities to produce alpha — above market returns — at increasingly lower costs, to offset the diminishing fees clients are willing to pay.