Impact of technology and AI on the fund management industry

The fund management industry is on the brink of a revolution as artificial intelligence and technology continue to reshape the landscape. In a recent interview on CNBC Africa, Portfolio Manager for Mazi NextGen, Stephen Engelbrecht, and Richo Venter, Head of Portfolio Management at Inn8 Invest, shared insights on the transformative power of AI and the challenges it presents for investors. Both experts emphasized the significant impact AI has had on the industry in recent years and predicted a continued acceleration in its influence moving forward. Engelbrecht highlighted the need for asset managers to adapt and evolve in response to the disruptive potential of AI, emphasizing the importance of embracing technology to streamline processes and enhance decision-making. Venter echoed this sentiment, noting that while South Africa may be lagging behind global counterparts in AI adoption, the shift towards data-driven strategies is inevitable. The conversation delved into the practical applications of AI in fund management, with Engelbrecht outlining how Mazi NextGen leverages machine learning algorithms to enhance investment decision-making. By incorporating AI as a filtering mechanism rather than a primary decision-maker, NextGen aims to mitigate human biases and optimize efficiency in the investment process. Venter offered insights into Inn8 Invest's approach, emphasizing the role of AI as an efficiency tool in supporting decision-making rather than replacing human expertise entirely. The discussion also touched on the evolving client preferences in the face of technological advancements, with Venter noting a growing awareness among clients of the benefits of data-driven strategies. As the volume of data continues to expand exponentially, the need for robust technological infrastructure becomes increasingly crucial for asset managers to stay competitive and deliver value to clients. Both experts emphasized the symbiotic relationship between human expertise and technological capabilities, highlighting the importance of striking a balance between the two. While AI offers unparalleled efficiency and analytical capabilities, Engelbrecht and Venter agreed that the human element remains irreplaceable in the asset management industry. Looking ahead, the integration of AI is expected to reshape talent recruitment strategies, with a growing emphasis on technical skills and data literacy in addition to traditional financial expertise. As the industry navigates the complexities of AI integration, the role of human capital in driving innovation and strategic decision-making will remain paramount.