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The results of the CIO Sentiment Survey broken down into investment impact and themes

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Operations and Technologies

Technology produced some of the most emphatic 2022 responses, highlighting asset owners driving ambition to increase technology within their organisations. In notable spikes from 2021 levels, around two-thirds of respondents cited the importance of process automation to improve staff efficiencies; 90 per cent are currently channelling technology to improve analytics tools and services; 94 per cent are investing in performance reporting and attribution tech and 97 per cent are deploying technology to manage risk.

94% of respondents are investing in performance reporting and attribution tech and 97% are deploying technology to manage risk

In Which areas are you expecting to further incorporate the usage of technology within your organization?

% of respondents

27%
32%
41%
0%
Communication / interactions with third party providers
26%
13%
57%
4%
Screening / manager selection
17%
0%
63%
21%
Plan participant communication
11%
7%
79%
4%
Process automation to improve staff efficiencies
7%
3%
90%
0%
Analytics tools / services
6%
0%
94%
0%
Performance Reporting / Attribution
3%
0%
97%
0%
Risk management

key:

No- Have reached desired end-state
no - not a prority
yes - continuing to incorporate
N/A

As for investor appetite for AI and machine learning processes, the survey found investors use this technology as a risk management tool first and foremost, followed by using it to support the investment process and manager selection respectively. Still, 26 per cent or respondents said they did not use AI and machine learning and had no plans to use it in the future.

In what areas have you incorporated analytics/AI/Machine learning within your organization?

% of respondents

38%
Risk management
29%
Investment process
26%
Do not use and no plans to use in the future
21%
Processautomation to improve staff efficiencies
14%
Broad portfolio advice/expertise
12%
Broad portfolio advice/expertise

Investors mostly incorporate technology into risk management via third-party applications like Aladdin as opposed to developing their own in-house tools. Examples include Oregon Public Employees Pension Fund recently adding Aladdin; Japan’s GPIF hiring Sony to explore use of AI in due diligence and investment management, and Canadian pension plan AIMCo and AI firm AltaML Inc. entering a joint venture to create AlphaLayer, an AI-based tool for investment decision-making and risk management. Research revealed that communications and process automation are increasingly optimised using technology, yet for many plans, attribution and analytics are still in development stages. Smaller plans are more likely face issues with under-resourcing As technology increasingly permeates firm-wide initiatives, 33 per cent of investors surveyed said they are adding new hires and dedicated team members to integrate technology. Most respondents (29 per cent) have investment teams of between 5-10 only.