Asian investors expect AI to be mainstream in financial services

Robotics and automation has been touted to generate $20 billion in savings across the securities services industry.

By Joe Parsons

A new survey of Australian and Asian institutional investors expects artificial intelligence (AI) technologies for financial services to be widespread over the next two to five years.

Nearly 60% of Australian-based institutional investors and asset managers surveyed by Northern Trust believe AI will be adopted within two years, while Singapore and Hong Kong-based firms anticipate this happening in the next two to five years.

“As the financial services industry adopts AI, we expect to see a continuing transformation of the efficiency of operational services, the provision of increasingly insightful information and enhanced client experiences,” said Danielle Henderson, head of market advocacy and innovation research, Asia-Pacific, Northern Trust.

“Market developments may include machine learning capabilities for faster and deeper data consumption, advanced analytics for better decision making and natural language generation for automated report commentary.”

The results of the survey reflect a similar study by McKinsey earlier this year, which highlighted that robotics and automation could generate $20 billion in savings across the securities services industry.

The McKinsey report also suggested the full advantage of AI would only be realised “when securities services firms incorporate digitisation throughout their corporate strategies, rather than through sporadic applications.”

However, around half of respondents in Hong Kong and close to 40% in Singapore believe greater clarity in the regulatory landscape is required for the financial services industry to adopt blockchain technologies.

Exchanges in Hong Kong and Singapore are already debating using blockchain for their post-trade processes.

“Amidst the fast-evolving financial market ecosystem and the growing importance of technological innovation, collaboration amongst financial institutions, technology enablers, regulators and governments are vital to supporting the efficiency, security and transparency emerging technology can bring,” said Caroline Higgins, head of global fund services for Asia at Northern Trust.