In this paper we answer the question: In the world of FinTech and AI, do we need still hedge funds? We describe and analyze how these three subjects are connected and how they are changing the financial services ecosystem. Are fintech companies and AI enemies from hedge funds? Do these industries complement each other? We hope this information is insightful and enjoy reading.
Today, customers want the best products and services combined with the best user experience and last but not least, they want options. In other words, they want it all and they want it now, and for the financial services industry it may be the biggest challenge in history.
New generations of customers with unlimited access to information are now informed about the new technologies, tools, and products in a matter of minutes, and they want to be a part of it.
A new breed of financial institutions called “Fintech” with a more technology-driven infrastructure are fulfilling the customers wants and needs, by taking advantage from new regulations created after the financial crisis of 2008, that made old traditional financial institutions expensive to operate and slower to innovate, gave these innovative, sometimes borderless fintech companies a competitive advantage.
Thanks to data and artificial intelligence (AI), customers have access to tailor-made financial products and services not only in banking but also in areas like investing, financial planning and advisory, in an inexpensive but efficient way, something that before was mostly available only for the rich and well-connected people. This made the financial industry in a way fairer and more transparent.
But there are some financial entities like “hedge funds” that are still reserved only for the wealthy investors. These entities are famous due their unconventional ways to make money in the markets and bringing investors outstanding returns, beating the market.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Definitions
- What is Fintech?
- What is artificial intelligence?
- What are hedge funds?
- The beginning of the fintech era
- Changes in regulatory and economic space...
- Evolution of technologies in financial institutions
- Changes in customer expectations
- Implementing fintech
- Static institutions and operations cost..
- Partnerships between established institutions and newcomers.
- Successful FinTech example.
- Artificial intelligence in financial services
- What AI can do.
- AI and humans...
- Who invests in hedge funds?
- Institutional investors..
- High net worth individuals.
- Why do people invest in hedge funds?
- Niche opportunities and alternative investments
- Portfolio diversification.
- Alpha generation....
- Conclusion.......
- Literature.
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to explore the role of hedge funds in the evolving financial landscape dominated by FinTech and artificial intelligence (AI). It analyzes the connections between these three elements and their impact on the financial services ecosystem. The paper investigates whether FinTech companies and AI pose a threat to hedge funds or if these industries complement each other.
- The rise of FinTech and its impact on traditional financial institutions.
- The role of AI in financial services, including its applications and benefits.
- The characteristics and purpose of hedge funds in the investment landscape.
- The potential relationship and interactions between FinTech, AI, and hedge funds.
- The future of financial services in the context of these emerging trends.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: The introduction sets the context by highlighting the changing demands of customers in the financial services industry. It emphasizes the rise of FinTech companies and their ability to meet these demands through technological innovation. The introduction also points to the enduring presence of hedge funds as an investment option for wealthy individuals.
- Definitions: This chapter provides clear definitions of key terms like FinTech, artificial intelligence, and hedge funds. It explores how FinTech leverages technology and data to offer new financial products and services. The chapter also details the capabilities of AI, particularly its deep learning capabilities, and explains the structure and function of hedge funds as investment partnerships.
- The beginning of the fintech era: This chapter delves into the emergence of FinTech companies in the aftermath of the 2008 financial crisis. It analyzes the factors contributing to their success, including regulatory changes, technological advancements, and changing customer expectations. The chapter also explores the strategic responses of traditional financial institutions to the FinTech challenge.
- Implementing fintech: This chapter focuses on the practical implementation of FinTech solutions. It examines the challenges faced by traditional institutions in adapting to new technologies. The chapter discusses the role of partnerships between established institutions and FinTech startups in fostering innovation. It concludes with an example of a successful FinTech company.
- Artificial intelligence in financial services: This chapter explores the applications of AI in financial services. It highlights the capabilities of AI in improving efficiency, accuracy, and personalization in areas like banking, investing, and financial planning. The chapter also discusses the interplay between AI and human expertise in the financial industry.
- Who invests in hedge funds?: This chapter identifies the key investor groups in hedge funds, including institutional investors and high-net-worth individuals. It explains the reasons behind their investment decisions, emphasizing the unique features and potential benefits offered by hedge funds.
- Why do people invest in hedge funds?: This chapter explores the motivations behind investment in hedge funds. It outlines the appeal of niche opportunities, portfolio diversification, and the potential for generating alpha returns as key drivers. The chapter sheds light on the unique strategies employed by hedge funds to achieve these goals.
Schlüsselwörter (Keywords)
This paper focuses on the key topics of FinTech, artificial intelligence, and hedge funds. It examines the relationships and interactions between these elements in the context of the evolving financial services ecosystem. The paper explores the potential impact of FinTech and AI on the traditional role of hedge funds and investigates whether these industries complement or compete with each other.
- Arbeit zitieren
- Tim Zähringer (Autor:in), Jose Carlos Villarreal Tovar (Autor:in), 2020, In the world of fintech and artificial intelligence (AI), do we still need hedge funds?, München, GRIN Verlag, https://www.grin.com/document/948625
