TECHNOLOGY

Buy-side brush off blockchain for AI technology

Investment professionals see AI technology as more disruptive for the industry than blockchain.

By Hayley McDowell hayley.mcdowell@strategic-i.com March 14, 2017 3:30 PM GMT

Research has revealed buy-side market participants are convinced artificial intelligence (AI) will be more disruptive for the industry than blockchain.

A poll of 108 investment professionals carried out by BackBay Communications and Osney Media found 49% identified AI as having the greatest disruptive potential for the industry.

In comparison, just 12% of buy-side respondents cited blockchain as being the leading disruptive technology.

A report from CB Insights published in February revealed funding for venture capital-backed blockchain firms plummeted 54% in 2016, although the number of deals increased in the fourth quarter last year, compared to the previous quarter.

Buy-siders were recently warned AI technology could replace up to 90,000 investment jobs and 230,000 across capital markets globally by 2025.

Another recent report from consultancy Opimus predicted the job losses, and said: “AI will intensify clients’ disenchantment with traditional asset managers and lead them increasingly to cheaper and automated strategies.”

Client reporting also under came under fire within BackBay Communications and Osney Media’s survey, with 75% of those surveyed stating it is a key focus for their firms at the moment and one in three are unsatisfied with current client reporting capabilities.

Jonathan Wiser, director at Osney Media, explained it is no surprise client reporting came up as an issue for firms.

“Our research reveals fairly widespread dissatisfaction with current client communications and it’s no surprise that client reporting, with a focus on digital, is firmly in focus as firms look to provide the information their clients need and in the format they want in order to improve the overall experience,” he said.