Artificial Intelligence for Asset Management and Investment

Chapter 20Adaptation and Emergence

THIS BOOK IS ABOUT BUILDING A hypermodern investment management firm. Isn't every asset management or investment management firm already modern? After all, for decades companies in the financial sector have invested in digital transformation. CEOs have bragged about their digital capabilities, and many companies in recent years have announced automation projects.

Giant firms manage trillions of dollars and are meticulously segmented into functional departments, each with their own department heads, business plans, and organizational targets. Powerful program management offices and centers of excellence are carefully embedded in day-to-day operations. Process-by-process charts of operations and best practices are recorded, observed, and followed. Clearly, everything that points to being modern is already there. Then why challenge the status quo? Why rock the boat that seems to be floating fine? Why tinker around with this well-oiled machine?

The reality is that they are anything but well-oiled machines. In fact, our obsession with finding cause and effect–centered relationships and architecting our functions and businesses as layers of cogs of well-oiled machines continues to fail us. Our siloed functions and their interdependencies have disappointed us on so many occasions. From strategic weaknesses to tactical miscalculations, from catastrophic failures to systemic meltdowns, we have seen our firms falter and cave every time markets hiccup. ...