Tuesday, August 14

Mutual funds take top spot for front office cognitive technologies in US

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Front office cognitive technologies are still very much a work in progress across the buyside, with only 7% reporting use for any trade processes, a new survey has found.

That figure was pretty evenly spread across different fund types.

Mutual funds in particular were found to have adopted cognitive tools at a higher rate, at 15%, than other firms. But there is also a greater polarization indicated, as 69% indicated they had no plans to do so.

Pension funds meanwhile were unanimous in this direction.

Hedge funds came in second for adoption rate, at a mere 8%, and are using artificial intelligence to automate a portion of their trading.

While cognitive is still emerging in the front office, the research noted that it is moving into the compliance domain, specifically in trade surveillance, for example, with natural language processing using machine learning to monitor e-communications and voice communications and in AML/KYC screening.

The research was designed by FactSet and TABB Group, which surveyed head traders, portfolio managers, analysts, and technologists from 60 US buyside firms that represented all tiers based on AUM.

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