BlackRock is stepping up their intelligence research. The hedge fund is setting up a new center dedicated to research in artificial intelligence, placing an emphasis on interest among asset managers in how machine learning can revolutionize the investment industry. The world’s biggest investment group, with $6.3tn of assets under management, is establishing a lab for AI research in Palo Alto, California.
“Research in AI can enhance current investment strategies and accelerate efforts to bring the benefits of these technologies to the entirety of the investment industry” said Keith Knutsson of Integrale Advisors.”
AI has emerged as a topic of interest in the corporate world. Furthermore, the power of modern computers and expanding digital data have allowed for natural language processing and machine learning. Asset management teams are especially interested in enhancing AI as they try to improve the performance of their fund managers, automate back-office functions, and enhance their client outreach by analyzing large amounts of data. Some researchers believe that AI could ultimately replace human fund managers completely.
BlackRock seeks to be on the cutting edge of technology in the world of finance and the setting up of the AI lab, and an internal “Data Science Core” unit announced is part of the company’s technological advancement plan. Included in this plan is the use of investing machines to analyze traffic through corporate websites as an indicator to the future growth of a company. Another technology that the firm uses is text analysis to filter through transcripts of earnings calls, looking for signs of whether a management team is positive or negative about their company’s prospects.
Analyzing large amounts of data with ease opens a world of possibilities for generating alpha. However, traditional techniques must continue to be improved if a firm is to outperform their competitors. The new lab represents a deepening of those efforts to enhance AI in the financial field.