The Savvy Investor Investment Technology section captures the latest articles, white papers, thought leadership, and commentary on trends affecting the business operations of global investment institutions, from front office to back office.
Global investment firms are typically comprised of the following departments: front office, which covers trade execution, fund sales and investment research; middle office, which oversees risk management and compliance; and back office, interacting with trade settlement and other client reporting obligations...
In these departments, investment technology plays a pivotal role in the delivery of investment products and services to clients. Although the use of software in the financial sector is ubiquitous, institutional investors continue to demand new sophisticated investment technology products in order to succeed in what is a digitally competitive world. For firms with the financial resources, modern IT infrastructure can now enable financial institutions to pursue optimum operational efficiency and profitability through new technology such as artificial intelligence (AI) and machine learning.
The AI in investment management is currently most visible in the front office function, where machine learning can assist traders with the execution of large market orders without disrupting the market. In investment research, AI is also being used by quantitative analysts to identify new sources of investment alpha with the aim being to create new investment strategies and products.
AI is also expected to improve back-office efficiency through the design of improved risk management systems and creation of automated liquidity and regulatory reporting. To prove regulatory compliance in the digital space, firms must also be able to demonstrate strong cybersecurity encryption measures to protect client and firm data and prevent cybercrime.
This data theme, known as ‘big data’, is now big business to cloud data storage providers, who have seen an opportunity to not only satisfy financial institutions’ data storage requirements, but also include cybersecurity, AI and machine learning analytics within storage costs. These analytics combined with a detailed audit trail will undoubtedly be useful, not only in the trading and settlement of liquid assets such as equities, bonds and ETFs, but also in private equity investments.
Investment Technology pertains to:
- Business Operations (front office, middle office, back office)
- Risk Management and compliance, auditing
- IT Infrastructure, AI, machine learning, NLP, big data, cloud storage
- Fintech, robo-advice, robo-management
As well as curating research on Investment Technology in asset management, Savvy Investor address the broad themes or 'megatrends' affecting the modern financial world such as Fintech, robo-advice and robo-asset management.