AI for Asian Asset Managers: Resolving the challenges to reap the rewards

Part 2 of a two-part series. Part 1 explores how AI can be a game-changer for Asset Managers in Asia.

In global terms, alternative Asset Managers in Asia Pacific tend to be small or midsize. This, combined with more conservative business sentiment, makes them highly cost-sensitive. Operations and technology are not generally seen as drivers of value, creating a cultural resistance to the adoption of new technology.

In addition, technology stacks for existing asset management firms are often quite outdated, so integrating new software can be difficult. The expertise to run, maintain, and update technology – reliably and at a reasonable cost – is often in short supply. Busy managers delivering returns might not have time to research new technology solutions, creating knowledge gaps around what, exactly, is available.

Exploring AI-related challenges for Asian Asset Managers

A key challenge unique to AI applications is that they require data and lots of it. Data is the new oil. The more data AI devours, the better its output tends to be. But quite understandably, many managers in our region worry about the security implications of giving third-party tools access to internal repositories of valuable and proprietary business intelligence. This issue is magnified in smaller firms without in-house cybersecurity support.

Like any technology implementation, AI adoption requires a step-by-step approach that utilizes robust change management principles. Managers in the region may be intimidated by what they see as a long and disruptive process.

Overcoming obstacles to AI adoption by alternative funds

While all these are legitimate concerns, they should not cloud the potential of AI, which is simply too large to ignore. If you’re not investigating the potential of AI already, it’s a safe bet that at least some of your competitors are.

It’s also true that some of the fears around AI adoption are misplaced or quickly overcome. While security is a concern, it’s perfectly possible to ringfence data sets for AI use, barring access to broader company information. Similarly, AI is a fast-developing field: the technology is improving constantly.

Other challenges can be overcome by choosing the right type of implementation model for your business. Many large US and European firms manage AI implementation in-house, either building software from scratch or buying off-the-shelf solutions and tailoring them for specific uses.

This is unlikely to work for Asia’s smaller alternative shops, which have less in-house expertise. Asian managers are likely to have more success by partnering with a trusted third party for some or all of their AI journey.

Linedata’s partnership approach to AI adoption – is it the right model for you?

Linedata offers just such a partnership model in Asia, with a range of advantages:

• A ‘people, process, technology’ approach.We can provide any combination of the three, tailoring AI adoption to the specific needs of your firm.
• Expertise. AI is not new to us—we’ve been providing AI tools to Asset Managers for a number of years. We can supply the human resources you need to successfully adopt an AI strategy and scale that resource up or down as the project demands.
• Technology. Whether your goal is faster, more efficient reconciliation and reporting, more accurate research, or smarter investment decisions, we provide the technology you need and manage, maintain, and upgrade it on your behalf.
• Trust. We’ve worked with many financial services firms on technology implementation. We’ll work with you to ensure the data you provide is tightly controlled and managed in accordance with all regulatory requirements.
• Coverage. Linedata can be with you for every step of your AI journey, from understanding the technology to establishing proof of value and, finally, implementing solutions at scale.

The takeaway here is that AI is not a technology that alternative Asset Managers in our region can afford to ignore. It’s a potential game-changer, bringing significant benefits to all areas of your business. Adoption comes with challenges, but a partnership model offers the smoothest path to successful implementation.

Learn more about our AI solutions for Asset Managers in Asia

We’ve used AI technology to help a number of hedge funds and private equity shops streamline and digitize operational processes. Here are three examples:

• AI-powered Recon solution cuts quarterly reporting timeline
• Manager streamlines Recon with AI-enabled onshore solution
• AI-powered digitization + Onshore support = Recon solution

Learn how Linedata is helping fund managers, administrators, and brokers in Asia Pacific operate more efficiently and cost-effectively with a portfolio of outsourced managed services.

About the author, Matthew Jarvis

Matthew Jarvis manages the sales and marketing function for Linedata Global Services in Hong Kong. He has a solid understanding and extensive relationships throughout the hedge fund industry in Asia-Pacific, working with hedge funds, hedge fund investors, and other hedge fund service providers.