Artificial Intelligence\n(AI) is triggering the next wave of digital disruption in investments. \nThe rapid development of AI technology systems, namely robotics, computer\nvision, language, virtual agents, and machine learning is changing the world,\nas software that learns supplements the work done by humans. While computers\nhad for many years been capable of doing billions of calculations in a moment,\nAI is empowering them to be decision-makers. The decision-making process is\ntotally redefining how investments are seen, sold, bought and managed. Instead\nof waiting for decisions, usually taken after 2-3 days of intensive\ncalculation, AI-powered systems are instantaneously opening up a world of\nopportunities to investors.<\/p>\n\n\n\n
AI investment is being\ndominated by digital giants, and globally acclaimed tech corporations such as\nAmazon, Google, Facebook, Apple and Microsoft are leading the charge. A fully\ndeveloped and empowered AI not only helps reduce the sales cycle but also takes the place of humans in\nterms of deciding. To put things in perspective, different studies estimate\ntech giants spent $20 billion to $30 billion on AI in 2016. A large, i.e. 90 percent of this is being spent on R&D and\ndeployment. <\/p>\n\n\n\n
The technology behind\nvoice-activated personal assistants, self-driving features in cars, and\nwebsites recommending films is now being leveraged to deliver smarter money\ndecisions. This is possible because AI has the ability to analyse data and\nactually learn from it. Instead of poring over\nthousands of permutations and combinations, and filters to decide the\ninvestment, AI technology does all that in a flash and even executes\ntransactions in certain investing models. Common examples are high-frequency\ntrading. <\/p>\n\n\n\n
Automated investments work\nwell in the Systematic Investment Planning (SIP) scenario, where a set amount\ngoes from your bank account to mutual fund account based on the defined\nperiodicity. By using AI model, an investor can get a foresight on when she\/he\ncan face hardships in finances and accordingly arrange finance in bank\naccounts. The AI-powered system will deduct a lump sum on that month, instead of\nthe SIP, without any manual intervention. Based on technical parameters and\nalgorithms, the AI system can also be flexible in terms of executing\ninvestments, taking decisions on its own instead of disturbing the\ninvestor. <\/p>\n\n\n\n
In the asset management\nindustry, AI-powered investment solutions\nhave huge scope. While earlier technologies delivered razor-fast analytics, the\nauthority on decisions rested on the human investor. The ability to take\ndecisions means investors have to be nimble-footed, alert to possibilities and\ndo the risk-reward analysis on their own. That is changing, with automated\ninvesting platforms. Not only are investors relying on gathering and\ninterpreting reams of information, they are also becoming comfortable in terms\nof allowing a software to make decisions. <\/p>\n\n\n\n
There are examples of\nexchange-traded funds using AI algorithms to choose long-term stock holdings.\nNew programs create portfolios by screening stocks to select the ones that meet\ncriteria. Instead of a human doing laborious calculations, AI allows all this\nto be done within moments and brings results that are accurate and dependable.\nAI embedded lines of code, like a diligent student, is continuously updating\nitself even as new terabytes of information come in.<\/p>\n\n\n\n
A beautiful example is heavy cognitive lifting. The human mind can only read so many patterns before its brain gives up. AI systems can scour\u00a0data to identify patterns that have so far remained obscure to human eyes. This opens up a treasure trove of opportunities in terms of investments in stocks, bonds, commodities and alternative asset avenues. Known patterns have been over-exploited, but new patterns when taken advantage of can generate the elusive alpha both investors and managers yearn for. <\/p>\n\n\n\n
For an investor, AI tech mimics the investment process that will be matched by only an army of investment analysts. But the AI system works around the clock! This allows to side-step the\u00a0inherent emotional and psychological weaknesses that engulf human reasoning. This is how AI allows informed human beings to manage and profit with the help of sound judgment. <\/p>\n","protected":false},"excerpt":{"rendered":"
Artificial Intelligence (AI) is triggering the next wave of digital disruption in investments. <\/p>\n