Asset AllocationMarch 26, 2024

Asset Management Firms Intend to Increase AI Budgets

Of technology decisionmakers surveyed by Rackspace Technology, 75% expect a bigger budget in the future, and 48% said artificial intelligence has substantially increased sales at their firm.

Reported by Matt Toledo

Technology decisionmakers at asset management firms report that their companies plan to increase their investments in artificial intelligence technology and have already seen substantial benefits from using it, according to a report from IT and cloud computing company Rackspace Technology, which surveyed 1,420 IT decisionmakers at asset management firms in February.

The information in this story was based off of a limited preview of the research.

The survey, conducted by Rackspace US Inc., found that 75% of IT decisionmakers plan to increase their budgets for AI this year by anywhere from $500,000 to $5 million. According to the report, 48% of respondents credited AI with substantial benefits. The survey of asset managers was part of a report titled The 2024 Global AI Report by Rackspace Technologies and Amazon Web Services.

“At many companies, IT departments went from being a necessary evil to getting whatever they want now that AI and the integration of data have caused the fastest transformation in technology history, as compared to the development of servers/web tech, cloud, e-commerce and mobile which took years to be adopted,” said Jeff DeVerter, chief technology evangelist at Rackspace, in a statement.

Of the 48% of respondents who said AI brought substantial benefits, 57% said they were able to create personalized marketing campaigns using AI, 55% said AI helped increase innovation, and 48% said AI helped increase sales.

Other findings in the survey include:

69% identified cybersecurity as the biggest risk when adopting AI;
69% say AI will require more improvement before it can be trusted, and answers it generates currently need human interpretation;
57% said the IT division is a main driver of AI strategy at their firm;
26% said a revenue-generating division is a main driver of AI strategy at their firm; and
18% said executive leadership is a main driver of AI strategy at their firm.

Rackspace argued that revenue-generating units at asset management firms have the most to gain by integrating AI and machine learning into their workflow. According to the survey, 35% of firms use revenue growth to measure the success of AI, even though it is mostly being used by non-revenue-generating divisions.

“In order to allow AI to generate more revenue, more revenue-generating departments should be encouraged and enabled to use AI,” said Nirmal Ranganathan, a vice president of engineering and AI architect at Rackspace, in a statement.

The survey also found that 55% of asset management firms have sought employees who have AI and machine learning skills.