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The Integration of AI in Investment Processes: Findings from SimCorp's Survey

In an evolving financial landscape, artificial intelligence (AI) stands out as a transformative force. A new report titled Investment Management 2025, commissioned by SimCorp, highlights insights from a survey of 200 buy-side operation executives globally. The key takeaway? While a significant 75% of respondents appreciate the potential benefits of incorporating AI into their investment workflows, there remains a pressing need for more information on how to execute this integration effectively.

Understanding the Need for AI

The urgency for AI integration stems from its potential to enhance various aspects of investment management. The survey indicated that buy-side professionals envision AI playing crucial roles in investment analysis, decision-making, risk management, data management, and client engagement. One respondent noted, "An AI tool can uncover risks we might not have been aware of." Despite this recognition, 16% of respondents felt ill-prepared to leverage AI, and only 9% considered themselves fully equipped to do so.

Georg Hetrodt, CEO of SimCorp, emphasized that AI is not designed to replace human jobs but to augment human capabilities, thereby refining decision-making processes and boosting operational efficiency. The value of AI investments resonates particularly when backed by a unified data infrastructure—an aspect many organizations struggle with due to existing data silos.

Data Challenges in Investment Strategies

Nearly half (47%) of participants indicated that their current data infrastructure comprises a mix of in-house and third-party solutions, leading to significant challenges in data management. A major takeaway from the survey is the necessity for organizations to create more standardized data models (67%) and consolidate their systems to establish a common data layer (65%). Additionally, 65% of respondents recognized the advantages of employing AI tools to enhance data understanding and predictability.

Laura Kayrouz, Senior Partner and Global Co-Head of Investments at Alpha FMC, stressed the importance of conducting a thorough data audit to identify discrepancies and redundancy. This initial step is crucial for establishing a robust data governance framework that ensures data accuracy and coherence while allowing for centralized data management.

Investment in Multi-Asset Strategies

The survey also revealed that improvements in data and operations for multi-asset investment strategies (40%) are paramount. A prevalent challenge for front-office teams is the inability to manage multiple assets from a unified view (60%). To manage multi-asset portfolios effectively, investment managers require systems with unified data architecture, providing a real-time overview of portfolios. A notable 64% of respondents plan to consolidate systems to achieve this objective.

Marc Schröter, Chief Product Officer at SimCorp, stated that as organizations diversify their portfolios across various asset types, they should invest in data strategies to support their decision-making capabilities. Failing to do so risks creating complex systems that may lead to disparate investment position silos, which ultimately hampers information speed and scalability.

Strategic Priorities and Their Impacts

The 2025 Global InvestOps Report also underscores key strategic priorities:

• - Improving operational efficiency is the top strategic imperative driving technological and operational investments.
• - Current buy-side business models struggle with visibility across investments, risks, and performance, presenting hurdles in timely product launches.
• - The ESG investment sector is viewed as the most significant area for technological innovation, especially highly regarded in North America (81%).
• - Enhancing data transparency in outsourced operations ranks as a primary improvement measure for the next 24 months, reflecting a strong desire for operational fine-tuning.

By focusing on core activities through outsourcing non-essential operational processes, firms hope to streamline operations and improve their overall performance metrics.

Conclusion

As the financial industry dives deeper into the realm of AI, organizations on the buy-side are urged to invest strategically in their data capabilities. The insights from SimCorp's InvestOps Report pave the way for informed decision-making, reinforcing the idea that technology and data governance are fundamental for competitive advantage in today's fast-paced investment environment. In pursuing these advancements, buy-side firms can look forward to not only enhancing operational efficiencies but also placing themselves at the forefront of investment innovation.

For a comprehensive understanding, you can access the full report via SimCorp's website.