Part One in a Three-Part Series on “AssetTech”
by Romi Mahajan- President, Pepper
Business coins portmanteau words liberally. As an example, combine “Finance” and “Technology” and you get “FinTech.” Similarly if you combine “Assets” with “Technology,” you get “AssetTech.” While the first is part of the everyday vocabulary in the industry, the latter is hardly understood.
This is curious, given the sheer size and importance of the industry.
World-wide, formal Asset Managers have over $120 trillion in” Assets under Management (AUM).” This number is staggering- it exceeds World GDP. The larger firms in the space themselves manage amounts measured in the trillions. It is not uncommon for the tallies of “deals” –even just in the US economy-exceeding $250 billion in a month. Again, these numbers suggest the importance of the industry as a whole.
Importance implies both opportunity and complexity. With the rise in numbers and valences of asset classes and the intermingling of private and public assets- and that too across geographies- the opportunities to generate ROI where it was “invisible” before have increased substantially. With this increase, the attendant increase in compliance, data, security, and governance needs come part-n-parcel. In addition, investors are calling for transparency, where opacity ruled the day before.
Practitioners understand that the best tool-set to manage the forests of data and to derive insights and actions is Artificial Intelligence. AI cuts across data, knowledge, decision-making, and pattern recognition. AI is by its very nature dynamic, just like the markets being harnessed and understood.
Investors and Asset Managers have yet another convergence of interests with regard to AI. Both are looking for a step-up in a competitive game and both are looking for potential ROI being converted into kinetic.
For this reason, AI has to be native in AssetTech. An AI-powered chassis is necessary for meaningful AssetTech platforms.
Here, distinguishing between rhetorical AI and real AI is key. Kicking the tires is essential. Furthermore, AI has to be at play at any entry point into the platform, from whatever workload you begin with.
Because of this, Marketing Darwinism and Pepper are together opening an industry dialogue and issuing an industry challenge.
Doesn’t Asset Management deserve its own technology and doesn’t that technology have to be the best we can offer? Isn’t it time we go get it?