New Survey finds that institutional investors believe that new technologies will fundamentally reshape the investment industry by 2025

A new survey conducted by Fidelity Institutional Asset ManagementĀ® reveals that its respondents believe that technology will lead to acceleration in the pace of business, give rise to new players and ultimately, lead to consolidation and fewer firms. The survey was the largest of its kind, and its respondents come of a pool of institutional investors representing assets under management in excess of $29-trillion.

 

To begin, the survey concludes that by 2025, Institutional Investors expect that the speed at which financial markets move, and decisions get made will be much more rapid, accurate and efficient. 62% believe markets will become far more efficient as a result of trading algorithms and enhanced intricate quantitative models. 80% believe blockchain and other technologies like it will change the industry in fundamental ways.

Three quarters (75%) of the 905 institutonal investor repondents, from 25 countries, including pensions, insurance companies, and financial institutions also said it is likely that non-financial technology firms will get into the financial industry, and these new players could make it necessary for some traditional companies to merge or be acquired, so they may be able to compete in the fintech and startup company space.

Transformative change is coming in the investment workplace

The advances in technology will have a structurally flattening impact on the Investment Management Industry, putting sophisticated financial technology within the reach of most investors, which will improve outcomes, and lower costs, for investors.

"The transformation of the investment management industry is within our sights due to expanding data sets, faster computing power and smarter technologies," said Jeff Mitchell, chief investment officer, Fidelity Institutional Asset ManagementĀ®.

As client needs become more complex, demanding more sophisticated and dynamic investment solutions, asset allocations will evolve - at the heart of this question is the issue and the belief of whether artificial intelligence will be capable of either replacing or assisting more comprehensively, in decision making, in contrast to today's traditional norms and means.

60% of respondents believe AI will augment, not replace, their jobs.

Slightly more than half of the Institutional investor respondents believe that technology will have a transformative impact in the investment workplace, replacing traditional investment roles of today.

Bottom Line: Relationships will be irreplaceable

"When we arrive at the intersection of humans and machines, it's important to remember what is irreplaceable, and that is relationships," said Judy Marlinski, president of Fidelity Institutional Asset Management. "Asset managers who provide expertise and oversight will always be valuable to their clients, but they should also recognize that their expertise has to evolve toward leveraging new technologies that can help their clients effectively meet their needs and objectives."

 

 

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