In Q1 of 2022, Quant Strats surveyed 100 hedge funds, asset managers, and investment banks from the buy side and sell side from across the US and Canada.
Key findings:
- AUM is up: over half of respondents say their organizations have seen an increase over past 18 months
- Data delay is a thing of the past: over half of organizations have multiple data science teams building capabilities
- Plenty still yearning for machine learning: only 22% of organizations surveyed use it regularly in decision making
- Talent and data top the agenda as the biggest priorities over the coming 18 months
- Experience trumps all in the battle for talent: 64% say time working in financial markets is a priority for new employees
- Eliminating bias is the number one data dilemma: 54% say it is a concern for their organizations today
- The (third) party’s over: 42% say budgets for third party spending have been cut
- Picking a partner takes time: Over half of firms say choosing a third-party partner takes 4 – 9 months
- Quantum impact: 39% say quantum computing will have biggest impact on industry over next 5 years
Machine learning
Almost a quarter (22%) of respondents say their organizations are regularly turning to machine learning techniques to guide their investment decisions, due to their ability to sift through both structured and unstructured data sets in real time to surface trends and patterns. Over four in ten (44%) of respondents say that they rarely use them.
Third party spend
The headline result will be of some concern to both vendors and industry observers: over four in ten (42%) of respondents report a decrease in their budgets for spending on third party resources. Could this be the result of a reallocation of financial resources to internal capacity building? It may well be.
Over a third of participants say their third-party budgets (36%) have increased after the pandemic. For many its onset was a rude awakening, showing up the cracks in technology estates or revealing digital gaps in operating models. In some cases, it simply provided the opportunity to press pause and consider the future: almost a quarter (22%) of respondents say their organizations are in a holding pattern, with spending levels remaining the same.
