What will AI do to quants? Here’s what $23T investors think
The financial world’s computer-loving crowd is preparing for the dawn of a new AI-powered era — but that doesn’t mean they’re ready to fully embrace the technology just yet.
In an Invesco survey of systematic investors with $22.5 trillion under management, 62% said artificial intelligence is going to be just as important as traditional analysis in a decade’s time, while 13% reckoned it will be even more significant.
Yet when asked about their own current use of the technology, respondents were ambivalent: Only 9% said they use it extensively, 38% said to a limited extent, and the rest said not for now.
The contrast paints a sobering picture of the pace of AI adoption on Wall Street as hype surrounding the technology hits fever pitch. Investors have turned to machines for tasks such as scanning the news for trading signals or dissecting market patterns, but they’ve largely held off from deploying them directly for actual allocation decisions.
“People don’t believe this is an easy thing,” said Bernhard Langer, chief investment officer of Invesco Quantitative Strategies. “Yes, AI is a huge toolbox. Big data is opening new horizons. But I have to be careful and understand what I’m doing.”
Invesco polled quants on potential and current applications of AI.
Even as they demur, the AI use case suggested by most respondents in the annual quant survey was identifying patterns and trends in markets — underscoring its immense potential to boost portfolio performance. Proponents say that because AI — or its data-driven offshoot, machine learning — is better at detecting complex relationships between multiple variables, it will prove more adaptive to changing markets.
The biggest perceived challenge of AI was the complexity and
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