Institutional money management's use of technology is expected to burgeon in the next two years, with that growth driven by a better understanding of what to do with it, sources said.
"The difference between people's experience with how they interface with technology in their personal lives and their consumer lives, and the gap between how they deal with that technology in their investing lives, are quickly closing," said Sudhir Nair, managing director, global head of Aladdin business in BlackRock Inc.'s solutions unit, New York. "That is creating incredible change."
Added Thomas Kim, CEO of fintech software provider Enfusion Ltd. LLC, New York, "Today, everything is centered around data — accessing it, using it, extracting insights from it — and in the next two years, there will be much more advancements in how … to utilize intelligence in extracting those insights in a much faster and more meaningful way. It's not that it hasn't started already, but it's such in a nascent state today that business intelligence using artificial intelligence will become much more common practice."
Continued developments and improvements in investment management technology over the next couple of years will revolve around:
- Efficient data analysis.
- Customized investment strategies.
- Digitization of investment processes.
Much of the promise of technology has centered around data, said Eric Bernstein, president of asset management solutions at Broadridge Financial Solutions Inc., New York, but data's use has not matched its potential because the industry still generally employs traditional low-tech methods across their operational infrastructure.
"Start with the allocators," Mr. Bernstein said. "If you think about what asset owners get from every manager, they're getting everything from a PDF report or an Excel spreadsheet to access to an investor portal. The struggle they're facing is in normalizing and homogenizing that information."