How Is Blockchain And Artificial Intelligence Changing The Face Of Asset Management? Posted on : Jan 22 - 2019

Asset management has a rich and traditional past that has helped build many people's fortunes over the years; many of the world’s uber-rich have their backgrounds in hedge funds and other forms of smart asset management.

However, like everything at this juncture in time, there is a change in the wind and asset management is not immune. The access to funds, and investing opportunities have been opened up and become more inclusive. But with that, there has been a demand for better performance or lower fees from this new breed of investor.

Large mutual funds were used to getting away with charging annual fees of 2-4 percent, despite average or poor performance as they had the backing of an institutionalised elite. Nowadays, those that are looking to participate in the market have moved en masse away from these types of investments and instead focused on very low fee, index-based, managers.

The demand increase for these types of funds and management has caused intense competition to develop as there is far more option and ease when it comes shifting money and investments around. For this reason, asset management has had to start looking forward rather than languishing on its stuffy past.

Big Data, Blockchain and Artificial Intelligence are all tools that are starting to find their feet in the asset management market as different companies and managers look to utilise these different burgeoning technologies to give themselves a competitive edge.

Successful asset management services are reliant on vast amounts of data, so it immediately makes sense that the science behind Big Data and the analytical power that comes with it be pointed towards asset management.

More so, Big Data is fuel for AI and as such, it can not only provide descriptive market insights but can also recommend prescriptive actions for future to maximise return on investment based on proper data fed to it.

Then there is Blockchain which is also starting to show its collaborative powers within data services and its affiliation with these other technologies, such as AI and IoT. Thus, the tokenisation and distributed ledger that blockchain offers makes complete sense in this financial space of asset management.

Understanding the need to evolve

Asset, or wealth, management is a term that was first seen in 1933, and since then it has been slowly evolving and changing - but always looking to deliver the same outcome for customers. Asset management has also grown in recent times where major banks and financial institutions have come in to offer services while hedge funds are also playing a huge role.

But, the capitalist and elite nature of this investing ecosystem has always been quite exclusionary and closed-minded, a standpoint which is no longer so freely accepted. The general global trend has become far more inclusionary regardless of the sector, but especially when it comes to wealth and access to money.

Edgar Radjabli, the Managing Partner of Apis Capital Management, an asset management company that is utilising blockchain and AI in their services, explains how things are changing, out of necessity. View More