Thoughts from the Digital Fixed-Income Evolution

The data science wave is here, and bond managers must adapt traditional investment processes to harness new technologies and amplify human talent.

As the fixed-income investing world continues its journey from a largely analog past to a digital future, investment managers must consider how to deploy the growing power of data science and AI across the business. Integrating new and emerging technologies—done effectively—has the potential to drive better and faster insights and decisions while making the most of human talent. We share a few observations from our own digital journey.

Designing Centers of Excellence Can Bolster Investing Capabilities

Data science can enhance a very wide range of investment activities, and we think it’s important for investors to choose the specific areas where they want to build their centers of data-science excellence. Those capabilities need to be developed over time, because the field continues to advance rapidly.

Designed and deployed effectively, centers of excellence can help strengthen investing capabilities, share new insights with clients and better learn from each other. In AB’s business groups, for example, we’re enhancing our distribution, operations, risk and compliance functions. From the strategic investing perspective, we can use data science tools to help create and stress-test asset allocations, incorporating diverse assumptions and client preferences.

Data science and innovation provide the capabilities to architect a next-generation investment platform—a crucial step in generating better investment performance and delivering on clients’ needs.