Rebooting the global asset management industry

32 Rebooting the global asset management industry AI and GenAI Are Set to Be Game Changers As we saw in the Executive Summary (Figure A), an overwhelming majority of our respondents expect AI and GenAI to have an impact on their business to a medium or large extent . Yet, implementation thus far is much less widespread than their promise would imply. Caution has been the watchword, as asset managers are under a fiduciary obligation to protect their clients’ money. That means only technologies tried and tested by time and events are taken on board. But with AI and GenAI come some formidable impediments, covered in the next subsection, which can only be resolved over time. However, that does not detract from the fact that these technologies are believed to have profound potential to transform every activity in the investment value chain, renowned for its extreme information intensity. At the heart of these technologies are conversational machine-learning algorithms, including ultra-sophisticated neural networks that are transforming how asset managers can make effective investment decisions, manage risks, and communicate with clients, while also automating a wide range of tasks like client onboarding, compliance checks, portfolio rebalancing, performance reporting and error corrections. However, the inherent complexity of these algorithms has forced a softly-softly adoption approach. Asset managers are going after low-hanging fruit that prioritize a limited number of promising use cases – ‘killer apps’ – that add value in specific processes or functions. As and when such cases are adopted over time, a number of front, middle, and back office operations are likely to be ripe for disruption as GenAI’s applications multiply (Figure 3.1). In the front office, far and away, the most vital activity singled out for disruption is investment management: the key value generator of the business (64%). It has long relied on human ingenuity for developing investment thesis from extensive data analysis. Far and away, the most vital activity singled out for disruption is investment management: the key value generator of the business. Figure 3.1 What operations will be disrupted most by AI & GenAI over time? Source: Citi/CREATE-Research Survey 2025 % of respondents Investment management Back office operations Information technology Sales and marketing Personalized client experience Risk management and compliance Personalized portfolios at scale Direct sales to end-clients (D2C) Trade execution Business management Easier private markets 62 54 51 50 49 46 44 39 37 36 64 “Natural language processing (NLP) technologies replicate the role of a researchanalyst quicker whilst usingmore data sources.” “Thematurity of use cases is still evolving, as we embedGenAI in all areas of our business. The totality of potential use cases is staggering.” Interview Quotes