How Automation Tools Are Revolutionizing The Investment Landscape In 2024

Emerging technologies like artificial intelligence, blockchain, and machine learning are actively improving the quality of tools at the disposal of investors throughout the financial landscape. But how are they delivering more effective levels of automation for investors in 2024?

The world of investing has become increasingly competitive in recent years, and both retail and institutional investors alike are beginning to appreciate the value of fast reactions and low-latency solutions in discovering new market opportunities ahead of rivals. 

Automation technology promises to deliver more innovations in the field of decision-making, efficiency, and cost-effective trading on an unprecedented scale. With this in mind, let’s take a deeper look at the innovative tools that are already making a big impact on the performance of traders today: 

The Rise Of Predictive Decision-Making

Last year may have brought the rise of the generative AI boom, but in 2024 we’ll see more sophisticated artificial intelligence tools become prevalent in driving efficiency in investor strategies.

AI is a leading component in leveraging automation to drive decision-making via the use of accurate and rapidly accessible market insights. 

While traditional investing generally leaned heavily on human decision-making, AI insights offer quick and actionable information that’s free of human error or biases that could cloud overall judgment. Instead, the use of algorithms can help to process significant volumes of data and expose patterns that could be impossible for humans to recognize at scale. 

We’re already seeing AI become a powerful tool in shaping investment decisions through its sentiment analysis capabilities. This serves as a perfect example of why artificial intelligence can be the perfect tool for uncovering actionable insights that would be too time-consuming or complex for investors to individually undertake. 

Sentiment analysis actively taps into big data to analyze social media content, news articles, economic announcements, and just about any other form of fundamental analysis to help improve the strategies of traders on the fly. 

There’s a growing market of sentiment analysis tools available to investors, and as the technology develops, we’re likely to see it become ingrained as a key strategy for both retail and institutional traders alike. 

Predictive analytics is also becoming actively bolstered by AI and utilizes vast historical data to identify patterns that are difficult for human eyes to spot. These insights can help traders to better understand future market movements. 

Embracing Algo Trading

Crucially, artificial intelligence also plays a key role in devising efficient trading strategies. While algorithmic trading isn’t exactly a new technology, AI has helped to transform its functionality to react effectively to changing markets in a fraction of a second. 

Through AI-driven algo trading, tools can automatically execute trades at the perfect time and capture momentary purchase opportunities. 

Just like the big data insights that automated AI insights deliver, this algo trading strategy is entirely free of the emotional biases and human error that can impact the performance of investors and can act based on just about any set of pre-determined criteria or trader goals. 

Algorithmic deal executions can change many aspects of the investment landscape and can offer a strong management tool when it comes to managing commission-based payouts for financial advisors and various other vendor services. 

Through a combination of performance analytics and comprehensive tax management, investors can more appropriately manage vendors based on their performance, and deliver commission-based payouts that more appropriately renumerates their performance. 

This technology will unite AI and smart contracts which can be leveraged through blockchain in the near future to leverage more appropriate payments for financial advisors depending on factors like scale, yield, and goal management.  

Low-Cost Efficiency

In 2024 and the years that follow, asset managers will utilize a suite of analytical, data integration, automation, and natural language processing (NLP) tools as an effective means of lowering the costs associated with investment insights and wealth management while improving efficiency across the board. 

These automation tools can actively improve performance and adaptable compliance while upholding a stronger level of security and maintaining a sufficient level of risk management in the process. 

One example of this cost-effective compliance can be found in EY’s investment compliance accelerator, which is a cloud-based AI solution for wealth and asset management firms. 

Equipped with machine learning and NLP capabilities, the tool automatically reads and extracts investment guideline language from relevant governing contracts and maps it to ongoing compliance rules to identify risks and address prospective liabilities. 

As a result, the tool can save around 75% in estimated end-to-end time expenses in the compliance space and can deliver more improvements throughout the value chain for wealth and asset management firms that transcend the confines of compliance and extend into client onboarding, billing, ESG considerations, and plenty more. 

Thriving In An Autonomous Future

Automation will have a transformative impact on financial markets and can bring extensive benefits to investors who embrace the evolution of these tools sooner rather than later. 

Emerging technologies like AI and blockchain will unite to become an essential tool in financial markets that could revolutionize how investors manage their portfolios and make key decisions. 

In this next-generation landscape, it will become essential for investors to stay ahead of the curve of new technological innovations, and to ensure that the tools at their disposal offer the level of performance that outpaces their competitors in markets where timing is of the essence. 

The investing landscape is changing at a rapid pace in 2024, and ambitious investors will need to adapt at a fast pace to ensure that they continue to benefit from automation technology in a meaningful way. 

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.