Global index giant, MSCI, has hooked-up with Google to develop an artificial intelligence (AI) investment risk management system.
Under a deal announced last week, MSCI will use Google Cloud technology including the Vertex AI platform and climate data tools such as BigQuery Geospatial and Earth Engine, to build services that help “clients better manage portfolio risks and opportunities and make informed investment decisions”, according to a statement.
The Google-powered MSCI ‘generative’ AI applications will target three main services for investors, namely, portfolio risk signals, climate analysis and a high-end chatbot designed to “simulate human language and generate responses that can enable clients to quickly answer questions and surface information about their portfolios and MSCI data, models, and solutions”.
Investors will be able to gain a more detailed understanding of climate risk metrics and low-carbon “opportunities” via the proposed AI-enhanced tools.
“MSCI will make it easier for investors to identify, synthesize, and communicate the broad range of climate exposures across asset classes,” the release says.
The MSCI-AI kit would enable portfolio and risk managers to more easily model and “rapidly act on significant volumes of risk signals from their portfolios, while also fostering greater collaboration between risk and portfolio management teams to build more resilient portfolios”.
Jigar Thakkar, MSCI chief technology officer, said while AI was already well-established as an investment tool, the recent technological break-throughs – showcased by ChatGPT – represented a step-change for the sector.
“The investment industry has long been fueled by AI and machine learning, which MSCI has been using for years. However, advancement in generative AI has jump-started a revolution in our industry,” Thakkar said in the release.
Once built, the mooted MSCI tools would “offer investors deeper data-driven insights, enhanced decision-making capabilities, and accelerated portfolio implementation”, he said.