The Surge of Generative AI in Asset Management
Generative artificial intelligence (GenAI) is rapidly emerging as a focal point for asset managers. According to a recent study by Broadridge Financial Solutions Inc., an impressive 72% of financial firms reported making “moderate to large” investments in GenAI, marking a significant leap from 40% in the previous year. This trend signals a growing recognition of the transformative potential of GenAI within the financial sector.
Adoption Rates and Expectations
In the landscape of asset management, roughly three in five (63%) of 175 surveyed asset managers are currently employing GenAI technologies. The study encompassed a broader scope of 509 global financial technology and operations leaders, revealing that more than two-thirds of these firms have integrated GenAI into their operations. Notably, those utilizing GenAI are optimistic about their investments, with a substantial portion—over two-thirds—anticipating a return on investment (ROI) within two years. Out of this group, 35% expect to see tangible returns within a short span of just six months.
Practical Applications of GenAI
When asked about their specific uses of GenAI, asset managers highlighted several areas of impact. A significant 47% reported leveraging AI chatbots to enhance customer service, while 43% utilized AI to refine marketing strategies and external communications. Furthermore, 26% of firms expressed that GenAI models played a crucial role in elevating the overall client experience. This illustrates a clear trend toward harnessing AI for improving interactions and services in the finance sector.
Motivations for Implementation
The motivations behind the adoption of GenAI tools are varied, with the most frequently cited reasons being cost reduction and enhanced operational efficiency, endorsed by 29% of respondents. Close behind is the emphasis on improving customer experience, mentioned by 28% of those surveyed, and enhancing employee experience, a concern for 19% of firms. These statistics underscore the multifaceted benefits that GenAI can deliver across different operational dimensions.
Barriers to Adoption
Despite the enthusiasm for GenAI, many firms remain hesitant to fully embrace the technology. Among those not yet utilizing GenAI, 57% expressed a desire for the technology to mature, indicating a cautious approach towards integration. Additionally, 45% voiced skepticism about potential ROI, while 24% cited budgetary constraints as a barrier to adoption. This hesitation hints at the broader uncertainty that often accompanies new technologies, especially in conservative sectors like finance.
The Challenge of Client Personalization
A critical insight from the survey is the challenge of personalizing client interactions, identified as the biggest hurdle by 52% of respondents. Many firms struggle with siloed departments, data, and technology, which collectively inhibit their ability to foster personalized client engagement. Alarmingly, even basic choices—like opting out of paper communications—are often overlooked, with 57% admitting they continue to send print materials to clients who have opted out.
Matt Swain, Broadridge’s head of insights and experience, emphasized the complexity of managing multiple relationships with clients through various financial products, stating, "Firms will have multiple relationships with the same customers… often running off their own separate legacy platforms.” This fragmentation makes achieving a cohesive digital experience exceedingly difficult.
The Impact of Legacy Technology
Legacy technology remains a significant roadblock for asset management firms. Half of those surveyed (50%) indicated that outdated technology and processes prevented them from delivering better customer experiences. Additionally, 62% of respondents acknowledged that siloed technology and data negatively affected enterprise-wide customer experiences. This highlights an urgent need for financial firms to modernize their technological infrastructure to meet the evolving expectations of their clients.
Survey Insights
The Broadridge study, conducted by Phronesis Partners, included insights from 509 financial tech and operations leaders worldwide from December 17, 2024, through January 31, 2025. The geographic distribution of respondents featured 49% from North America, 26% from Europe, and 25% from the Asia-Pacific region. The survey also included qualitative interviews, providing a deeper understanding of the sentiments surrounding GenAI adoption in finance.
Summary
The growing embrace of generative artificial intelligence in the asset management sector reflects a shift towards enhanced efficiency and improved client experiences. As firms navigate challenges related to legacy systems and personalization, the potential for GenAI to revolutionize the industry is becoming increasingly apparent. The journey towards digital transformation is underway, yet it comes with its set of challenges that firms must tackle to fully leverage the benefits of this groundbreaking technology.