One of the benefits of the 21st century is the availability of large amounts of data that can be analysed quickly. Big data, in combination with AI, has the potential to revolutionise the investment industry – as well as ruin it. After all, the financial industry is famous for reinventing the wheel in ever more complex and complicated versions – just to see this new wheel break down when it hits the first pothole. In my experience, big data and AI have so far not produced any meaningful progress in investment processes and the returns generated by new algorithms that rely on big data have been virtually indistinguishable from returns generated by more traditional investment approaches. Now that may change in the future, but it won’t be easy.
The big risk of big data
The big risk of big data
The big risk of big data
One of the benefits of the 21st century is the availability of large amounts of data that can be analysed quickly. Big data, in combination with AI, has the potential to revolutionise the investment industry – as well as ruin it. After all, the financial industry is famous for reinventing the wheel in ever more complex and complicated versions – just to see this new wheel break down when it hits the first pothole. In my experience, big data and AI have so far not produced any meaningful progress in investment processes and the returns generated by new algorithms that rely on big data have been virtually indistinguishable from returns generated by more traditional investment approaches. Now that may change in the future, but it won’t be easy.