Artificial intelligence (AI) technology continues to evolve, now capable of performing asset management functions.
Asset management involves the administration of assets or investment portfolios for specific purposes, such as maintaining long-term asset value and maximizing returns.
Because it requires strategic capabilities, asset management is typically undertaken by professionals in finance and capital markets.
However, investors are now also utilizing AI-powered digital applications or robo-advisory financial services to manage their assets.
This is evident from a PricewaterhouseCoopers (PwC) survey report titled "Asset and wealth management revolution 2023: The new context."
"Almost 90% of institutional investors in our survey believe that the use of disruptive technologies, including big data, AI, and blockchain, will deliver better portfolios and returns," stated the PwC team in their report.
"More than 90% of asset managers are already using these new technologies to improve investment performance," they continued.
PwC estimates that the total value of assets under management (AUM) by robo-advisors globally reached USD 2.5 trillion in 2022.
This figure represents a 31.5% increase compared to 2021 (year-on-year/YoY), marking the highest record in the last five years.
However, this value only accounts for approximately 2% of the total assets under management of global asset management companies, which cumulatively reached USD 115.1 trillion in 2022.
PwC projects that AI or robo-advisor managed assets will continue to grow in the coming years.
"We predict that assets managed by robo-advisors will reach USD 5.9 trillion in 2027, more than doubling compared to 2022," said the PwC team.
"Further development allows AI to refine trading strategies, and generative AI could pave the way for enhanced analysis of unstructured data," they continued.
PwC conducted this survey of investment managers (250 respondents) and institutional investors (250 respondents) globally. More than half of the surveyed institutional investors manage assets exceeding USD 10 billion.