AI in Financial Portfolio Management: Practical Considerations and Use Cases

Role	Entity
Author	Joseph Byrum
Series Name	AI Financial Portfolio Management
Publishers	– Springer Nature – Cutter Consortium – INFORMS OR/MS Today – LinkedIn
Years Published	2019-2024
Main Subjects of the Series	– Artificial Intelligence – Portfolio Management
Has Parts	– AI in Financial Portfolio Management: Practical Considerations and Use Cases – Accelerating the Quest for Alpha with AI – Allying a Military Model to Financial Chaos – Equipping the Intelligent Investor: Embracing Market Complexity with AI – The Intelligent Investor: Harnessing AI for Repeatable Yet Adaptive Investment Processes – Incorporating AI into a Public Equity Manager’s Investment Process – Democratizing Wall Street: How AI Assistants Liberate Investors from Analyst Bias – The Future of Causal Reasoning in Investment Management

Extract from AI in Financial Portfolio Management: Practical Considerations and Use Cases in the Book Innovative Technology at the Interface of Finance and Operations (Springer)

This paper focuses broadly on the application of various types of AI technology in the buy-side of financial services and more specifically on the application of AI to financial portfolio management. Current market volatility in response to the COVID-19 pandemic has given new urgency to the perennial challenge of achieving quality investment returns, and the ever-present trade-off between return and risk that all portfolio managers have to master. The complexity and volume of relevant information today, and the rate of change in the current environment, have only heightened the need for smarter financial choices. Various types of AI may be used to respectively achieve higher portfolio returns, increase operational efficiency, and enhance the customer experience. Successful AI usage will always involve an optimum mix of machine-provided and human-based services, where the AI enhances and accelerates human portfolio decision-making and saves labor costs.