Artificial intelligence (AI) has grown in presence in asset management and has revolutionized the sector in many ways. It has improved portfolio management, trading, and risk management practices by increasing efficiency, accuracy, and compliance. In particular, AI techniques help construct portfolios based on more accurate risk and return forecasts and more complex constraints. Trading algorithms use AI to devise novel trading signals and execute trades with lower transaction costs. AI also improves risk modelling and forecasting by generating insights from new data sources. Finally, robot-advisors owe a large part of their success to AI techniques. Yet the use of AI can also create new risks and challenges, such as those resulting from model opacity, complexity, and reliance on data integrity.

This hand book aims to show how to restructure your firm for the AI era and give you a new structure to run your business in a scientific manner, understand that model, and then figure out how to set up your firm from a horizontal capability perspective. The structure of the book is written based on functional competencies. You will learn them as functional capabilities embedded in the value chain of the firm.

This hand book does not require any programming or computer science expertise and is written to introduce the basics of AI to anyone, whether you have a technical background or not.