Key Takeaways from the Report
SimCorp, a leading financial technology company, has released a new survey-based report revealing that buy-side organizations are seeking deeper integration of artificial intelligence (AI) into their investment processes. The “Investment Management 2025” report, based on insights from 200 buy-side executives, sheds light on the challenges and priorities the industry faces as it moves into 2025.
AI’s Potential and Gaps in Integration
While 75% of survey respondents acknowledge AI’s potential benefits, many still struggle to effectively apply it across critical investment areas such as investment analysis, decision-making, risk management, and client engagement. One respondent remarked, “An AI tool can be used to uncover risks that might have remained unknown to us.” However, 16% of respondents reported feeling unprepared to harness AI, with only 9% feeling fully ready to integrate the technology.
Georg Hetrodt, CEO of SimCorp, explained that AI’s role is not to replace jobs, but to enhance human capabilities, particularly in decision-making and operational efficiency. “The true value of AI is realised when supported by a unified data layer, allowing for a seamless integration of all investment data,” Hetrodt added.
Success Metrics for AI Integration
Respondents identified key success metrics for AI in investment processes, with the top priorities being increased efficiency in data cleaning (46%), enhanced data visualisation (42%), and faster time to insights (41%). These metrics demonstrate the growing importance of AI tools in enhancing operational workflows and providing better insights.
Data Infrastructure Challenges
The report highlighted that nearly half (47%) of respondents rely on a combination of in-house and third-party data solutions, creating challenges in data consistency and integration. To address these issues, 67% of firms prioritise building more standardized data models, while 65% plan to consolidate systems for a unified data layer. Another 65% aim to leverage AI tools for improved data insights and predictability.
Laura Kayrouz, Senior Partner & Global Co-Head of Investments at Alpha FMC, emphasized the importance of overcoming fragmented data sources. “A thorough data audit, followed by a strong data governance framework, is the first step to centralising data access and ensuring consistency across teams,” Kayrouz said.
Focus on Multi-Asset Investment Strategies
Buy-side organizations are also prioritising improvements in managing multi-asset investment strategies. Forty percent of respondents plan to implement initiatives aimed at enhancing data and operations for multi-asset management. A major challenge identified is the inability to manage these assets in a single view, with 60% of firms citing this issue.
To overcome this, 64% of respondents plan to consolidate their systems to provide a real-time, total portfolio view. This strategy aims to give investment managers a holistic view of their portfolios, ensuring all changes across public and private markets are reflected in real time.
The Importance of Data Strategies
Marc Schröter, Chief Product Officer at SimCorp, stressed the need for robust data strategies. “As firms diversify their portfolios across more asset classes, it’s essential to invest in data infrastructure to avoid adding complexity that hampers decision-making and scalability,” Schröter said.
Other Key Findings
Additional insights from the report include:
- Improving operational efficiency is the top strategic priority for technology investments in 2025.
- Many buy-side firms face challenges in obtaining a firm-wide view of investments, risk, and performance.
- ESG investing is identified as the area with the greatest potential for technological innovation.
- Greater transparency in outsourced operations is a key focus for firms in the next two years.
Conclusion
SimCorp’s “Investment Management 2025” report underscores the increasing need for buy-side organizations to embrace AI and enhance their data strategies. With more efficient systems and better integration of AI, firms can improve their investment decision-making, enhance operational efficiency, and better position themselves for the future.
