BlackRock, the world’s biggest investment group, is setting up a new center dedicated to research in artificial intelligence, underscoring the heightened interest among asset managers in how Machine Learning can revolutionize many facets of the investment industry.
According to BlackRock the lab will “augment our current teams and accelerate our efforts to bring the benefits of these technologies to the entirety of the firm and to our clients. We clearly live in a world with more computing power, more data and new methods to take advantage of.”
AI has emerged as a hot topic across the corporate world in recent years as the swelling power of modern computers and expanding reams of digital data have unlocked fields like Machine Learning and Natural Language Processing.
The asset management industry is particularly interested in the area, as they try to improve the performance of their fund managers, automate back-office functions to cut costs and enhance their client outreach by analyzing vast amounts of internal and external data.
Quantitative managers are “engaged in an arms race” as data analysis techniques that work today will not necessarily be relevant in five years. “Big data offers a world of possibilities for generating alpha [market beating returns] but traditional techniques are not good enough to analyze the huge volumes of information involved,”
According to BlackRock AI is about increasing the efficiency of what they do across the board. Every part of their business is already being augmented by these new capabilities.