Effective delivery of asset management services such as mutual fund management, equity management, or fixed asset management requires access to analysis of large volumes of data. Thus, it only makes sense for asset management agencies to incorporate big data analytics into their decision-making processes. Big data tools can analyze huge chunks of market data and evaluate risks and opportunities associated with different assets. The analysis of assets based on vast amounts of historical data helps asset managers to identify assets that are headed towards peak profitability as well as the ones diving towards insolvency. Advance knowledge of market trajectory minimizes risk and maximizes the ability to spot opportunities for profits. Asset management software programs driven by are already gaining popularity among asset and wealth management companies.
Following the industry-wide adoption of big data to gain market insights and monitor asset performance, the next wave of disruption in the asset management industry is being brought about by artificial intelligence (AI). AI, fueled by big data, can not only provide descriptive market insights but can also recommend prescriptive actions for future to maximize return on investment. AI can evaluate investment options by measuring the environmental, social, and governance (ESG) score of companies, which acts as an indicator of their long-term sustainability. Another application that forebodes the use of AI in asset management is robo-advisor, and without requiring human intervention. Although existing AI applications cannot be fully trusted with high complexity investment problems such as those involved in mergers and acquisitions (MA), they can help individuals preserve and increase their wealth.
Any discussion regarding technology in finance, will be incomplete without the mention of blockchain. Blockchain’s ability to store data in a universally synchronized and decentralized manner can enable asset management companies, especially in ensuring regulatory compliance. and involves maintaining private, secure records, such as client information. Blockchain can store client information in an anonymized, immutable manner to meet regulatory standards. It can also be used to speed up transactions involved while trading or liquidating assets such as stocks and commodities. Blockchain eliminates the need for intermediaries and cuts down on transaction time, without compromising security.