Artificial intelligence can help asset managers save costs and bolster their operational efficiency across the front, middle and back office, according to Muzzaffar Othman, chief operating officer of Permodalan Nasional, Malaysia’s largest fund management company.
He said in the front office, AI can support client engagement and investment by drawing on large data sets from data providers, and that in the middle office, the technology can help with compliance and control, ensuring investment rules are followed.
“In the back office, AI can help to improve productivity, such as generating investment reports and validating data,” he said during a panel session at the Federation of Investment Management Malaysia’s annual conference in Kuala Lumpur on October 9.
However, he said the availability of accurate and quality data remains a key challenge to implement AI.
“If AI learns from skewed data sets, then the predictions will be inaccurate,” he said.
Fellow panellist Xav Feng, a director at LSEG Lipper Asia Pacific Research, agreed with Muzzaffar, saying that high quality, accurate and comprehensive data are “essential for liable AI outcomes”.
“AI serves as a powerful complement to human expertise,” he added
But the two panellists offered different perspectives about the potential impact of AI on employment.
Muzzaffar said “some” analysts will be replaced by AI in the future because “analysts cannot consume as much data as AI”.
Feng disagreed, saying that AI won’t replace humans and that the technology should function like noise cancelling earbuds.
“What we are encountering today is that there’s too much information out there, there’s a lot of noise. This is where I want AI to function like my AirPods to do the noise cancellation, to filter out the unnecessary noises, but not to replace my ears,” he explained.
Another panellist, Azleen Osman Rani, director of the Institute for Capital Market Research Malaysia, agreed with Feng.
She said AI can improve analysis and pattern recognition. “However, the final judgement must remain human.”