Key facts
- Asset managers' spending on AI research analytics and tools has increased 40% in the past year.
- 70% of large asset managers expect AI to generate standard research coverage over time.
- 80% of asset managers with over $150bn in assets expect only slight increases in overall research budgets.
- Firms are shifting research spending towards senior analysts with differentiated insights.
- 95% of surveyed executives have increased AI budgets in the past 12 months.
- Firms with higher quality data are seeing greater benefits from AI investments.
Asset managers are significantly increasing their investments in artificial intelligence, but the effectiveness of these expenditures is increasingly tied to the quality of their underlying data, according to recent industry surveys. Spending on AI research analytics and tools has risen 40% over the past year, as reported by Substantive Research.
Substantive Research also found that 70% of large asset managers anticipate that standard research coverage will eventually be generated by AI. This shift is leading firms to reallocate their research budgets, focusing more on access to senior analysts and unique insights, rather than commoditized information. The firm noted a trend of mid-tier analysts exiting the market, contributing to a leaner sell-side structure.
Despite these changes, 80% of asset managers overseeing more than $150 billion expect their overall research budgets to see only modest increases in the next two years. They are prioritizing spending on "differentiated, tenured analysts" as routine research becomes automated.
Separately, a survey commissioned by Clearwater Analytics revealed that nearly all executives (95%) have increased their AI budgets in the past 12 months, with 85% planning further significant increases. However, the report highlighted that firms with higher data quality are realizing more substantial benefits in areas like risk management, reporting, and analysis. Clearwater's CEO, Sandeep Sahai, pointed to a "trust gap" with AI, where many firms question the accuracy of their data despite believing it is complete. The survey indicated that AI is becoming integral to core investment processes, with 95% of respondents believing it is important for meeting investment management goals.