Augmenting our investment capabilities – how we are using AI

By Rob Ansari and Kathy Awanis Garcia

Artificial Intelligence (AI) is set to transform how we work and live in profound ways. In a time of considerable economic and market uncertainty, AI is perhaps the primary source of potential change.

Indeed, in our most recent Large Asset Owner Barometer, large institutional investors told us they see AI as the most influential long term theme shaping the macro environment over the next 5-10 years, with 43% saying it will be highly influential and a further 38% saying it will be influential.

Adoption is likely to be widespread – institutions are engaging with AI’s potential to transform their operations, and drafting AI strategies in response to competition and client demands.

Irrespective of use-case or strategy, data will arguably be a key driver of AI success. Data is the fuel of AI and, Mercer Investments has access to a vast and diverse array of data.

Given access to that fuel, we aim to put our clients at the forefront of our consideration of AI adoption. AI offers us a tantalizing opportunity to support enhanced client outcomes globally, collaborating to deliver increased output and active insights into market dynamics.

However, having access to data is one thing, knowing what to do with it is another. Keeping the ‘human in the loop’ is more than the tagline. In our view, it is pivotal to the successful adoption of AI in the broad investment landscape – our approach is to focus on using AI to augment, not simply automate. Our (and our clients’) experience in investment consulting and investment decision making should be evident in any AI generated output.

The opportunities to develop and deploy AI tools, both within our own business and for our clients, are manifold and we continue to explore the optimum ways to use this emerging technology to drive value and meet client needs. But it is not enough to simply dive in and start testing. An enterprise AI strategy needs to be governed by the right values and oversight to ensure benefits are maximized while risks are controlled.

How we’re exploring AI

Our data shelves are well-stocked, but we aren’t looking to simply develop solutions that are dictated by data availability. Our approach is client-first and we seek to facilitate robust decision making across institutional investment spectrum. We then seek to deploy AI test-concepts across multiple fronts, assessing capabilities wherever we think AI has the potential to offer impact, insight and value.

We are focused on how AI can help us to provide better and differentiated capabilities to our clients, faster.

Alongside this, we are exploring how AI can help us to unlock capabilities that were simply not possible previously, combining otherwise unworkable volumes of information, or unstructured data, to unlock insights. As asset owners move through the markets, they can leave digital footprints that previously would have been impossible to see – we’re using AI to find these footprints, using them to seek new insights into portfolio and investment management best practices.

While our AI work continues to build momentum, and we will continue to ideate and test new and better ways to drive our industry forward, we are already exploring two potential concepts that give an idea of the potential benefits AI can bring.

Mercer Rate Sense examines the possibility of using AI to accelerate and expand investment manager research coverage by learning from prior research engagements, and embedding the deep expertise of our human researchers, with the ultimate objective is to allow our researchers to broaden their scope, reaching more managers across asset classes, vehicles, and geographies.

Mercer Market Sense investigates the use of AI to identify quantitative capital allocation flows and signals from our unique allocation pattern data to support decisions around resource allocation and market positioning.

What comes next

The successful integration of AI requires more than technology – it also requires a deep knowledge of how investors make decisions. We are also making strategic investments in people and platforms to support sustainable, enterprise-grade innovation.

Governance remains central to our AI strategy. We are implementing robust frameworks for data stewardship, bias mitigation, and model transparency—building trust into the AI development lifecycle.

We remain acutely aware of the risks that ill-conceived AI implementations can bring. Our approach is governed by a rigorous responsible AI framework, which aims to ensure that our AI use cases are transparent and auditable, overseen by colleagues to ensure processes remain ethical and compliant.

For Mercer, the goal of AI is to empower our people and our clients, allowing them to do what was previously impossible, impractical and uneconomical, in collaboration and in a way that is sensitive to the way that investors are set up to make decisions.

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