MDOTM | AI-Driven Investment Solutions

The 2024 State of AI

How Asset and Wealth Managers are leveraging AI to add scale and speed to their investment process

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The Research Scope

AI is undergoing a profound transformation within the asset and wealth industry, prompting investment professionals to reassess their approaches.

As a result, AI applications in asset and wealth management are taking center stage on CEO agendas due to their potential to streamline investment processes and augment overall value.
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MDOTM's research and development team has analysed key insights sourced from prominent consultancy firms and global institutional research networks to comprehend leading institutional investors' approach on AI integration for investment decision-making.

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Key Challenges For Asset & Wealth Managers

According to Deloitte, client's expectations for more personalized solutions and timeliness are at an all-time high

More complex markets means explaining in a clearer way performances and writing reports is becoming tougher than ever

KPMG says that institutional investors are facing rising costs and profit margins are facing increased pressure

Source: Deloitte, 2024 Investment Management Outlook; KPMG, Improving Margins For Institutional Investors; KPMG, Cutting Through Complexity

FINDING #1

‍Market complexity and client demands are higher than ever

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Asset & Wealth Managers Are Solving Challenges With AI Integration

By the end of 2024, Gartner says that global tech spending is projected to reach an impressive $5 trillion, indicating the escalating significance of technology as a competitive advantage. Institutional investors are increasingly prioritizing fee reduction, technological advancements, and tailored solutions.

Due to their ability to streamline investment processes and augment overall value, AI applications are confirmed to have a leading role for asset and wealth managers.

AI Integration Brings Numerous Benefits

Artificial Intelligence (AI) is providing new opportunities which extend beyond cost reduction and efficient operations. Deloitte Global’s latest report, Artificial Intelligence—The next frontier for investment management firms, showcases how AI integration translates into numerous benefits across organisation as a whole.

Generate
Superior
Alpha
Enhance Operational Efficiency
Manage
Risk
Effectively
Improve
Customer Experience
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AI is helping Asset & Wealth Managers tackle market complexity

AI-Driven Investment Insights & Market Outlook
Thanks to AI, CIOs, Portfolio Managers & multi-asset teams can leverage unbiased investment insights to combine their own view with AI’s suggested positioning and enhance their strategic and tactical asset allocation at sector and industry level

Higher Margins & Faster Growth
According to Deloitte, AI integration can increase productivity by 13.8%, AuM by 8.1%, and revenues by 7.7%

Source: MDOTM, The Science Behind Sphere; Deloitte, Wealth and Asset Management 4.0; CFA Institute, “Artificial Intelligence in Asset Management”

FINDING #2

Investment firms are leveraging AI to improve productivity and profit margins

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Tommaso Migliore
CEO & Co-Founder

AI Adoption Brings Profitability & Streamlines Processes

"A growing number of institutional investors is actively seeking the integration of AI to achieve highly personalised solutions, optimise portfolios, and enhance risk management.

As shown in PwC's Global Investor Survey, more than three-fifths of investors perceive AI as indispensable for value creation, signaling a trend unlikely to stop anytime soon."

How Artificial Intelligence Can Enhance The Investment Process

Drag the cursor to see in which areas AI can support your investment process.

MDOTM - How AI can add value to the investment process.

Top AI Use Cases For Investment Professionals

Portfolio Construction & Rebalacing At Scale
With AI, investment managers can systematically achieve an optimal portfolio construction that overperforms traditional mean-variance approaches and reduces deviations from their targets

Automated Reports & Commentaries
‍Automatically give your clients AI-powered commentaries that explain your portfolio’s positioning.

Hyper Customization At Scale
‍Asset & Wealth managers can now offer hyper-customized portfolios to their final clients and manage thousands of portfolios simultaneously

Sources: CFA Institute, “Artificial Intelligence in Asset Management”; MDOTM, The Science Behind Sphere; BCG, “Reshaping Business with Artificial Intelligence; Deloitte, “Wealth and asset management 4.0”

FINDING #3

AI can help investment professionals build & rebalance portfolios at scale

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“Imagine a customer asking the names of top drivers of alpha in their portfolios. A fully developed, generative AI  could perhaps answer that question in a matter of seconds, which might be hours faster than pre-generative AI processes could generate.”

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Enhance your investment process today

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Watch The Full Research Podcast

In this podcast session, Tommaso Migliore, CEO & Co-Founder of MDOTM Ltd, and Peter J. Zangari, Partner & Head of Americas of MDOTM Ltd, delved into the implications of the previosuly mentioned findings for investment professionals. They explored the path of AI adoption among asset and wealth managers, shedding light on what these insights mean for the industry as a whole.

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Discover All AI Use Cases

Discover the value of AI across different use cases. From portfolio optimisation to hyper customisation, read our R&D's periodic research on the benefits that AI can bring to investment decision-making.

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How you can create custom portfolio commentaries at scale with StoryFolio

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How To Build & Rebalance Portfolios At Scale

Discover how you can use AI to create hyper-personalized portfolios

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How To Leverage AI-Driven Investment Insights

Forward-Looking Inputs For Your Investment Decisions

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MDOTM Ltd
MDOTM Ltd. is the global provider of AI-driven investment solutions for Institutional Investors. Founded in London in 2015, the company has a team of over 100 physicists, data scientists, engineers, and finance professionals.  MDOTM Ltd. provides Portfolio Advisory and Asset Allocation services to Banks, Insurance Companies, Family Offices, Pension Funds, Wealth and Asset Managers. Financial institutions across the UK, Europe, and the US leverage MDOTM Ltd.’s advisory and its AI platform to support their investment process.
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