In the world of fintech and artificial intelligence (AI), do we still need hedge funds?

Seminararbeit , 2020 , 24 Seiten , Note: 1,3

BWL - Investition und Finanzierung

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.

Table of contents

1 Introduction

2 Definitions
2.1 What is Fintech?
2.2 What is artificial intelligence?
2.3 What are hedge funds?

3 The beginning of the fintech era
3.1 Changes in regulatory and economic space
3.2 Evolution of technologies in financial institutions
3.3 Changes in customer expectations

4 Implementing fintech
4.1 Static institutions and operations cost
4.2 Partnerships between established institutions and newcomers
4.3 Successful FinTech example

5 Artificial intelligence in financial services
5.1 What AI can do
5.2 AI and humans

6 Who invests in hedge funds?
6.1 Institutional investors
6.2 High net worth individuals

7 Why do people invest in hedge funds?
7.1 Niche opportunities and alternative investments
7.2 Portfolio diversification
7.3 Alpha generation

8 Conclusion

9 Literature

• Hochschule: Hochschule Pforzheim
• Note: 1,3
• Autoren: Tim Zähringer (Autor:in), Jose Carlos Villarreal Tovar (Autor:in)
• Erscheinungsjahr: 2020
• Seiten: 24
• Katalognummer: V948625
• ISBN (eBook): 9783346288202
• ISBN (Buch): 9783346288219
• Sprache: Englisch
• Schlagworte: AI, hedge funds, funds, fintech, finance, Investment