George Gatch during a closed Q&A at the JPMAM International Media Summit.

With the proliferation of AI tools on the market, it seems unusual for a major asset manager to invest in developing its own.

But unsatisfied with what was on the market, JP Morgan Asset Management decided to take the risk with in-house development, which CEO George Gatch said it gives the US$3.1 trillion* ($4.75 trillion) asset manager a competitive edge in the marketplace.

“We did a deep analysis of tools that are available in the industry, and we came to the conclusion that none of them satisfied the needs of our portfolio managers and research analysts,” Gatch told Professional Planner last week during the asset manager’s media conference in London.

“JP Morgan Chase and Company invest over $15 billion a year in technology. That advantage that creates for the asset management business in terms of cyber, proprietary ecosystems for generative AI, and we can reach in and use those tools with the 1500 engineers that we have dedicated in asset management. No other asset management firm has that advantage.”

Gatch said many of their competitors made the decision to outsource their portfolio and risk analytic capabilities, while they made the decision to build proprietary capabilities.

“[They] are tailored specifically to our investment processes and capabilities – I believe that gives us an edge,” Gatch said.

Spectrum, the firm’s portfolio management tool is used by the group’s research analysts and portfolio management teams.

“We’re using AI, big data, 40 years of history that we have on earnings and research on companies around the world, combined with data that we buy from the street,” Gatch said.

“We’re using big data and AI ways of providing that research to portfolio management teams and we’re using some cool generative AI capabilities there as well, Spectrum GPT, which simply allows an analyst to hit a button, summarise research either from an internal analyst or from external data that we buy, so that in a click of a button you can do what took hours now takes seconds.”

In the portfolio management system, it uses optimisation tools that allow a portfolio manager to optimise portfolios with a click of a button.