- A new report surveying 200 global buy-side operations leaders reveals that the majority (75%) understand the potential benefits of integrating AI, but need more information to integrate it into their investment processes.
- The respondents qualitatively highlighted a need for AI to support with investment analysis, decision making, risk management, data managementrisk management, data management and client engagement.
- The buy-side organizations plan to build more standardized data modeling (67%) and to consolidate systems for a common data layer (65%) to overcome challenges with their data infrastructure.
- ESG investing continues to be the business area where respondents see the greatest opportunity for technological innovation (58%), particularly in North America (81%).
Buy-side organizations worldwide require more information on how to integrate AI into the investment processes, reveals the InvestOps Report, “Investment Management 2025”, commissioned by financial technology company SimCorp.
Based on a survey of 200 buy-side executives conducted by WBR Insights in Q4 of 2024, the report provides insights into the buy side’s challenges and priorities entering into 2025.
The survey shows that 75 percent of respondents understand the potential benefits of AI but need more information on how to apply it effectively to the investment processes, such as investment analysis, decision making, risk management, data management and client engagement. When asked which areas that would benefit most from the use of an AI tool, one respondent noted “An AI tool can be used to uncover risks that might have remained unknown to us”. Additionally, 16 percent feel unprepared to leverage AI, while 9 percent feel very prepared.
“AI is not about replacing jobs but augmenting human capabilities, enhancing decision-making processes, and increasing efficiency. However, the advancements in AI can deliver true value for investment professionals when supported by a unified data layer where all investment data is in one place, moving away from data siloes,” said Georg Hetrodt, Chief Executive Officer at SimCorp.
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When asked how to measure the success of an AI tool in the investment process, the buy-side leaders prioritize increased efficiency in data cleaning (46%), followed by enhanced data visualization (42%) and accelerated time to insights (41%).
Addressing data challenges
The report also found that nearly half of respondents (47%) say their current data infrastructure is a combination of in-house and third-party solutions, leading to data challenges. The top three priorities for addressing these in the near term are building more standardized data models (67%), consolidating systems for a common data layer (65%), and utilizing AI tools for better insights and data predictability (65%).
“Data is the “key” to the front office, yet many firms struggle with fragmented and inconsistent data sources,” said Laura Kayrouz, Senior Partner & Global Co-Head of Investments at Alpha FMC and one of the report’s contributors. “The first step to overcoming this challenge is a thorough data audit to identify gaps and redundancies. Once completed, firms should implement a robust data governance framework to ensure data accuracy, consistency, and compliance. This framework will form the foundation for a centralized data management solution, capable of breaking down silos and enabling unified data access across teams.”
When asked about technology and operations, improving data and operations for multi-asset investment strategies (40%) ranked as the top initiative that the buy-side organizations are planning to implement. The main challenge for front office teams is the inability to manage multi-assets in one view (60%).
To effectively manage a multi-asset class portfolio — the primary challenge in supporting the front office – investment managers need a system architecture with a unified data layer that provides a total portfolio view in real time, with any changes made in one area of the business instantly reflected throughout the entire investment lifecycle for public and private markets. This is shown in the survey, where respondents plan to consolidate systems for a real time total portfolio view (64%) to address this challenge.
“What we see from this research is that investment managers increasingly need to invest in data strategies to support their goals and decision-making capabilities,” said Marc Schröter, Chief Product Officer at SimCorp. “Otherwise, when firms diversify their portfolios across more asset types, they risk adding complexity to their system landscape. This could lead to disparate silos of investment positions across the business, which slows the velocity of information and impacts the ability to scale. There’s a strong business case for data initiatives.”
Other key findings from the 2025 Global InvestOps report include:
- Improving operational efficiency is the top strategic priority guiding technology and operations investments for 2025.
- Inability to get a total firm-wide view of investments, risk and performance and launching new products in a timely manner are the key challenges for the buy-side firms’ existing current models.
- ESG investing is the business area with the greatest opportunity for technological innovation in the next few years, particularly in North America and APAC.
- Greater transparency in outsourced operations data tops the list for how the firms want to enhance their operating models in the next 24 months.
- Focus on core business is the most desired outcome by using an external service provider for non-core business processes.
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