There's a mismatch at big US investment firms on the importance of AI, and it could highlight a level of 'complacency'
- While artificial intelligence is all the rage, few big US funds are testing it out, according to a new report from Fidelity.
- Investors have high hopes for how AI can augment, not replace, investment activities.
- Investors' complacency could be part of the problem, said one asset management executive.
Everyone's talking about artificial intelligence - but big US investment funds aren't yet keen to try it out, according to a new study.
About 71% of US-based firms are not currently testing or considering how AI and advanced analytics can be applied to their investments, said a Fidelity survey of over 900 institutional investors published on Thursday. However, a similar percentage of US investors agreed that AI and technological advances will augment humans' traditional investment roles by 2025.
The results show that even though artificial intelligence is touted for its potential to transform the workplace, many big US firms are slow to embrace the technology in their day-to-day.
Complacency with the status-quo could be one reason, said Jeff Mitchell, chief investment officer of Fidelity's institutional asset management arm.
"What people are saying is in the Americas, they still haven't found a way to understand how it'll come into the process, but they're confident it will be part of the enhancement of what we deliver going forward," he said.
Mitchell noted a gap between investors' internal use of AI and their high expectations for AI's promises. Globally, 69% of funds expect to use AI for asset allocation in the future, while nearly the same number plan to use it for performance and risk evaluations, the Fidelity research said.
Mitchell added that he was "shocked" by how US investors lag their international counterparts. While more than three-quarters of domestic investors aren't considering AI use, only one-third of institutions globally are not.
Fidelity counts itself among the asset managers embracing AI. The firm is using the technology to simply its investment processes and communications, he said.
Others include AB, which built an artificial-intelligence-powered virtual assistant for fixed-income trading and other responsibilities at the $500 billion money manager. The bot, which launched in early 2018, runs on Symphony. The financial workflow application also hosts a program called APOLLO.ai, which uses AI to sift through data sources to show custom content and analytics.