The global rating agency noted that firms with ample resources and fully embrace AI-powered automation will see the greatest benefits.

“Despite that, AI will not provide sustained market outperformance for the industry,” it said.

He said AI’s latest advancements have the potential to significantly enhance workflow efficiency and automation at asset management firms by boosting productivity, upgrading products and improving services.

“However, advanced AI will not enable all asset managers to outperform the market.

“The enduring impact and real value of AI in asset management will not lie in achieving investment outperformance, but in enhancing customer experience, personalising investment solutions, and gaining efficiency through automation,” it said in a sectorial note.

According to Moody’s Ratings, AI could also help democratise financial analysis, making markets more efficient for a broader range of investors.

“It could provide regular market participants with a better understanding of financial statements, data and Securities and Exchange Commission (SEC) filings, thereby narrowing the gap between professional and retail investors.

“The latest generative AI models that can analyse and interpret vast amounts of structured and unstructured financial and non-financial data,” it said.

Moody’s stated that this capability could expand pricing action among a wider group of analysts and investors, enhancing the overall intelligence of financial participants collectively.