Digital Innovation in Portfolio Management

In this research, we explore how digital innovations are changing the ways that investment teams generate ideas, form views and analyse portfolios. We also examine the organisational implications of these changes.

This research paper is a continuation of our focus on digital capabilities. Other papers that have considered how ‘digital’ is enabling change in investment management include Digital CRM.

Goals

The goals of this paper are to:

  • Describe developments in AI and big data and the opportunities that they provide 

  • Outline the nature of these opportunities and their limitations  

  • Show how portfolio managers are using new techniques and tools

  • Examine the drivers of differing levels of innovation across firms

  • Give examples of firms innovating in this area

  • Describe the organisational issues that arise as a result of this innovation

  • Outline the main considerations for a medium to large sized firm looking to make a start in this area

Scope

We aim to cover the following areas: 

  • The developments in AI and big data that are enabling innovation

  • Innovation in idea generation, research and view formation

  • Innovation in portfolio analytics

  • Organisational issues around this innovation

This research specifically excludes the following areas:

  • Execution of portfolio transactions

  • Innovation in the marketing of investment products

  • Managing big data and data projects

Methodology and Sources

The information included in this report has been derived from a number of different sources including interviews with CIOs, portfolio managers, quantitative managers, alternative data suppliers, portfolio analytics suppliers and investment consultants. We would like to thank all those that took part in the research for their contribution.

In this process we:

  1. Interviewed members to understand what firms have been doing and are considering in this area

  2. Interviewed other investment managers that have been active in this area

  3. Interviewed alternative data and portfolio analytics suppliers to understand their propositions to asset managers and how these propositions are being used

  4. Interviewed investment consultants to understand their attitude towards the opportunities and potential pitfalls from innovation in this area

  5. Worked with Accenture colleagues specialising in big data and AI to understand their applications in other industries

Deliverables

A detailed research report on leading practices and operating models for supporting digital innovation in portfolio management.

Target Audience

  • Senior staff developing investment research.

  • Senior operations and IT staff responsible for front investment operations, data management and research.

  • Firms interested in deepening their knowledge on this topic and exchanging ideas with industry peers.