Will Financial Asset Management Benefit from AI?

August, 2019

Merging AI into the finance world

Rapid digitalization has altered the way organizations do business and the way it transformed customer’s demand. Cognitive systems powered by artificial intelligence (AI) are used to manage financial assets. Since, the financial asset management depends upon computational applications for forecasting, modelling trends and trading information, hence, neural network is an effective and self-learning algorithmic approach, which when applied in financial market predictions can ensure a smooth and accurate functioning. This will influence future investment decision making. Further, technologies such as IOT, cloud computing, blockchain etc. support the financial asset market growth.

Analyzing the market of financial asset management

Insurance firms and banks are adopting advanced technologies to enhance asset management capabilities, detect fraud, automate the operational process and handle compliance. Infact, 27% of enterprises are implementing advanced technologies to gain actionable information, enhanced productivity, and reducing cost.

According to Infoholic Research, the Global AI in Financial Asset Management Market is expected to grow at a CAGR of 33.84% between 2019–2025. The key factors that lead to such market growth are change in customer’s expectation and increase in adoption of digital systems. According to secondary research, the section dealing with predictive analytics contributes approximately 38.87% of market share. Here, it is worth mentioning that USA continues to dominate the market share.

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The market research report generated by Infoholic Research on AI in Financial Asset Management contains the below chart that clarifies the distribution of market share across the world.

AI in Financial Asset Management

Market growth and its inevitable challenges

This kind of market growth is triggered from internet-based banking services and growing Fin Tech. However, the developed nations show limited growth pattern which majorly impacts the financial service-related investments. The financial market witnesses several challenges due to data security and Government regulatory policies. In order to reduce such challenges, new technologies are adopted. The report Infoholic Research created through market research also adds the fact that 90% of the enterprises will adopt AI by 2020. Apart from this, the following also contribute towards increasing the dependence on AI for financial market predictions.

  • Analysis of market trends including cost and market fluctuations
  • To enhance processing speed
  • To identify market pattern
  • Precision marketing
  • Automate workflow
  • Leverage investment opportunities
  • Fraud management

Scenarios of AI managing financial assets

  1. AI helps to consolidate and analyze unstructured data from different sources to gain meaningful insights. This helps in the process of event monitoring effectively and efficiently.
  2. Often the analysis on an investor’s attitude towards security helps to understand the market better.
  3. AI is very useful for investment banking and portfolio management. With the help of predictive forecasting it helps in long-term price movements.

In a nutshell

The Government initiatives will enhance the scope of AI implementation in the finance industry. Its involvement in financial asset management will have a positive impact on new business opportunities and will enhance customer’s experience. In a way AI can substantially reduce the complexity in managing CRM. Hence, AI in financial asset management will prove quite beneficial in mergers and acquisitions.

– Kathakali Basu
Content Writer
Infoholic Research