Global asset managers are continuing to expand their use of artificial intelligence for growth and operations, according to Northern Trust’s Driving Growth in Asset Management report
The survey of 300 CEOs, CIOs and other leaders at firms across North America, EMEA and APAC found that almost every respondent was now deploying AI in some form, although their usage differed.
Nearly half of respondents identified consolidating data from multiple sources as a major challenge, while others pointed to sourcing and aggregating investment analytics, all issues that AI could help improve.
In total, almost 60% said AI could best support their data accuracy and quality, according to the report.
Nick Gilbert, head of asset servicing, EMEA at Northern Trust, said: “AI is moving from experimentation to implementation across the industry.
“But its value will depend on the quality, governance and accessibility of the data beneath it.”
See also: Mercer finds AI now used by majority of asset managers in investment process
More broadly, the report noted that asset managers are increasingly focusing on simplicity and scale, with just 47% of respondents prioritising product expansion, down from 60% two years ago. Similarly, the number of respondents who said consolidating/reducing products was a priority had jumped from 5% to 28%.
To achieve this, more asset managers were turning to outsourcing core activities, with the number of managers planning to do this almost doubling over the past two years.
Angelo Calvitto, head of Asia Pacific at Northern Trust, added: “The goal is not only lower cost, but a more straightforward operating model with stronger control, better quality and the scale to support future growth.”
Ryan Burns, head of asset managers and private markets, Americas at Northern Trust, continued: “Rather than pursuing broad-based expansion, firms are directing resources toward investment expertise, client outcomes and distribution, while extending successful strategies through vehicles such as ETFs, semi-liquid funds and collective investment trusts.”
Finally, the report also noted that firms were becoming much more targeted in terms of their distribution.
Instead of purely targeting new product launches, 54% said they were more focused on identifying new types of clients and a further 53% said they were expanding into new countries and markets, in order to find areas where they can better differentiate themselves.
See also: Asset managers moving AI from back-office to investment process
