COVER STORY

QZ Asset Management has successfully harnessed the advantages that Big data and Artificial Intelligence provide to reach its business goals.

Asset & Wealth Management is seeing explosive growth due to the rising wealth of high-net-worth people and the general affluent and a clear trend to defined contribution retirement savings. It involves developing and implementing investment strategies, selecting and managing investments, and reporting on the performance of those investments to clients.

Since it is difficult for individuals to manage their assets, asset management companies manage investment portfolios for individuals and institutions. These portfolios may include a variety of assets such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other securities. These companies play a key role in helping investors manage their financial assets and achieve their long-term financial goals.

QZ Asset Management is one of the world’s leading asset managers providing investment services across a broad range of traditional and alternative asset classes for all clients. For more than ten years, QZ Asset Management has managed its clients’ wealth and served them as trusted and holistic advisors. Blake Yeung, CEO of QZ Asset Management, was with the CEOViews team to share their story on how they are trying to achieve their organizational goals.

Inspiration

QZ Asset Management has successfully harnessed the advantages that Big data and Artificial Intelligence provide to reach its business goals. The founders were inspired by the successes of AI when pitted against the human mind, in the cases of Deep Blue, AlphaGo, and many others. It was clear then that artificial intelligence was outstanding in several aspects – (i) ability to process immense data, (ii) pattern recognition and unbiased interpretation of such data, and (iii) ability to find the most optimal solutions to complex problems.

These are qualities that management at QZ Asset Management would look for in ideal candidates for investment managers, and the machines were winning! They quickly realized that this would become the inevitable future of financial investments. They must advance traditional investment services onto a Fintech platform to create a user-friendly channel for institutional and retail clients. Thus they began their journey to develop dedicated investment AI technology, and soon BDAI technology was created.

Vision and Mission

QZ Asset Management’s mission and vision were to build their own massive database and state-of-the-art algorithms so they could have a wide range of variables in investment, as well as their correlation and suitability to our vision and strategies. They have been pretty successful thus far, and the BDAI technology had been very well received in Fintech summits around the world prior to COVID-19.

QZ Asset Management has successfully harnessed the advantages that Big data and Artificial Intelligence provide to reach its business goals.

Delivering results with consistency & efficiency

While it is easy for an organization to churn great numbers for a quarter, maintaining the same for a longer duration is very difficult. QZ Asset Management has been delivering great results consistently for years now. They have a stellar reputation for their BDAI technology and therefore are constantly invited to conferences to share the cutting-edge technology and its application in investments. Initially, they aimed to outperform the markets in A-Shares trading, and now they are deploying BDAI in many more asset classes and across other disciplines. As a pioneer, they are more than happy to provide solutions to government, quasi-government and central banks when they need such services.

They simply focus on doing what they do best using AI technology to produce the best investment outcomes. Their AI works 24/7 with automated procedures and proprietary algorithms for self-learning, and they let it do the heavy lifting. They then focus on providing the human touch, on spending their time, effort, and cognitive thoughts on understanding clients’ needs and objectives and serving them better. This segregation of tasks has allowed QZ Asset Management to perform very well over the past years.

Achieving momentum in the market

In a very short span of time, QZ Asset Management was able to gain momentum in the market. Without a doubt, the biggest reason is due to the success of our BDAI technology. It is a credit to the QZ team, including their algorithm experts, mathematicians, and financial professionals. They are the unsung heroes for all that they have achieved so far. It factors down to everyone pulling in the same direction, having a unified vision, dedication, and commitment to reach the same goals, and the management is truly blessed to have the support of these amazing people.

Role of technology

Traditional asset managers and hedge funds employ investment managers that actively manage their funds, and this is problematic in two ways, firstly, fund performance is highly dependent on the skill level of the manager it employs, and this is very inefficient, as they know because humans are highly susceptible to errors in judgment. Secondly, they simply cannot scale without experiencing some form of performance deterioration. That is why an AI-based system works best in a turbocharged environment like this – BDAI has taken over 95% of the financial analysts’ work in QZ and facilitates automated investment decisions, which means QZ Asset Management is super-efficient with low management fees and has grown tremendously over the years.

Their key approach to success is in maintaining and growing the database. For AI to be effective, it must have all relevant data that can contribute to market movements, such as fundamentals, technology, and valuation of the constituents of the market. Furthermore, they have identified and labeled key indicators as leading, coincident, and lagging so BDAI could react accordingly. These can be further divided into smaller variables and assessed with various factors. More works have to be done to make standard operating procedures immaculate.

Unique capabilities and services

Speaking about their unique offerings, Blake said, “We are a savvy investment firm with the ability to forge trust, turbocharge technology and create hyper-relevant customer experiences at scale. Our major business is to provide managed investment services to institutional and retail clients that consistently outperform the market”.

Growing a big database for optimizing the algorithms is the most complicated part. Safe to say, they have tried our BDAI in A-share in China successfully, and it is working in S&P500 too. QZ BDAI is their core value, and it should have all the merits for contributing to the growth and development of QZ Asset Management.

Upcoming market trends

When asked about what could be the trend in the near future, Blake said, “App-based investment services will continue to grow and be popular, especially in emerging markets where there is a large unbanked population with a high mobile penetration rate. People are now learning to no longer rely on large and cumbersome banks for financial services. Instead, the digitization of money is creating huge streams of data on what customers actually do with their money, paving the way for personalized and hyper-personalized intelligent services such as QZ BDAI to offer customers helpful insights and relevant financial products and services in the future”.

Challenges

QZ Asset Management has faced skepticism throughout its journey, from being one of the first early adopters of AI technology in investments to questions about how one can sustain the business during the ongoing pandemic. Instead of letting these challenges knock them down, this has provided them a platform and opportunity to better themselves. Everything that has transpired since the beginning of 2019 has been nothing short of phenomenal. They have shown that technology and online strategy are robust and capable of producing excellent results even during the most difficult of times, and people worldwide are starting to see that.

Technology is revolutionizing the delivery of financial services and has greatly impacted the way the world operates.

Technology is revolutionizing the delivery of financial services and has greatly impacted the way the world operates. Through advanced analytical tools and automation, QZ Asset Management can make more informed investment decisions and provide its clients with real-time updates on their portfolio performance. As technology continues to evolve, it will continue to adopt and integrate new tools and strategies in order to provide the best possible service to clients.