A survey released by Barclays Bank on Thursday shows that AI has gradually moved beyond the experimental phase in the global credit investment sector and begun entering practical applications. However, its primary uses remain concentrated in areas such as research analysis, securities screening, and risk assessment, with human judgment still holding a central role in investment decision-making. Barclays strategists Zornitsa Todorova and Andrea Diaz Lafuente stated in a report that AI is expected to reshape workflows and job responsibilities within the investment industry, but it will not significantly reduce headcount in the short term. The market generally believes that AI will enhance productivity rather than replace employees on a large scale.
The survey covered 410 buy-side institutional investors from North America, Europe, the Middle East, Africa, and Asia, including hedge funds, asset owners, and actively managed asset management companies. The results showed that only 7% of respondents expect AI to lead to significant layoffs in the coming years, with most institutions believing that the primary impact of AI will be to boost productivity.
In terms of specific application scenarios, research analysis is the main area where AI is used. Among hedge funds, 44% of respondents said they primarily use AI for research work; among asset owners and actively managed fund managers, this figure reached 52% in both cases. Additionally, modeling analysis and risk management are also areas where AI is widely applied. In securities screening, approximately 25% to 26% of hedge funds and actively managed fund managers use AI to screen investment targets, while among asset owners, this proportion is 20%.
However, AI penetration in trade execution remains relatively low. The survey found that 77% of hedge funds, 84% of actively managed fund managers, and 88% of asset owners believe that AI currently plays a very limited role in trade execution. In portfolio construction, the scale of AI application is also relatively small.
The survey also revealed that hedge funds are significantly ahead of other types of institutions in AI adoption. 72% of hedge funds use AI tools on a daily basis, far higher than the 49% of actively managed fund managers and the 38% of asset owners. Barclays analysts believe that hedge funds typically employ faster, higher-turnover investment strategies, where the speed of information processing and decision-making efficiency are directly linked to generating excess returns, making them more proactive in embracing AI technology. In contrast, asset owners such as pension funds and insurance companies have longer investment cycles and stricter decision-making processes, resulting in slower AI adoption.
Despite the expanding use of AI, data security and privacy issues remain the industry’s biggest concerns. Whether hedge funds, asset management firms, or asset owners, all rank data security as the greatest constraint in the process of AI deployment. The credit market involves vast amounts of transaction data, client information, and proprietary institutional models, making the data highly sensitive. Institutions are generally cautious when introducing AI systems. Furthermore, issues such as regulatory compliance requirements, corporate cultural resistance, and internal process adjustments also limit the further proliferation of AI to some extent.
