“The machines don’t make the decisions, they provide information to help humans make better decisions.” – George Gatch, chief executive of the JPMorgan asset management business.

JPMorgan’s (NYSE: JPM) CEO of Asset Management, George Gatch, asserts that heavy investment in artificial intelligence (AI) has given the firm a significant edge in the market. Gatch, a veteran with 37 years at JPMorgan, revealed that the company is investing twice as much in AI compared to competitors to process data faster and manage risk more effectively.

He believes this gives them a competitive advantage, providing better insights than the market. Despite over 90% of investment firms using disruptive technologies like AI, JPMorgan opted to build its own tech, considering it a competitive advantage for portfolio managers and clients. (Financial Review)

The global AI market in asset management is estimated at $2.6 billion in 2022, expected to grow at a compound annual rate of 24.5% over the next seven years. JPMorgan is among investment banks launching more ETFs to challenge BlackRock (NYSE: BLK), Vanguard, and State Street (NYSE: STT). The firm’s strategy involves offering active ETFs to grab market share, forecasting a 40% annual growth rate compared to 17% for indexed ETFs.

Gatch sees big implications, noting that active strategies are driving dramatic growth in the industry. Furthermore, JPMorgan’s focus on blockchain and digital currency may eventually reduce costs, although a bitcoin ETF is not currently in the plans.

As illustration, the JPMorgan Equity Premium Income Product has become highly popular, attracting significant inflows with net assets of around $29 billion in November 2023.

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