Korea’s Mirae Asset to open AI business unit in New York

Mirae Asset Group, the pioneer in South Korea’s mutual fund industry, plans to set up an artificial intelligence business unit in New York as the financial conglomerate aims to expand global investment services with robo-advisors for future growth.

“WealthSpot, Mirae Asset Group’s AI unit, is set to be opened in New York City,” the group founder and Global Strategy Officer Park Hyeon Joo told The Korea Economic Daily in an interview on Tuesday. “We will dispatch core Mirae Asset executives such as Kim Yeon Chu, head of derivatives, to lay the foundation for the business.”

Kim, who is touted as one of the group’s future leaders along with Kim Namki, head of Mirae Asset Global Investments Co.’s exchange-traded fund (ETF) business, has been appointed to head up WealthSpot.

The New York unit is poised to oversee the group’s AI business and handle the robo-advisor sector, global investment asset allocation and ETF development.

Robo-advisors are digital platforms that provide automated, algorithmic investment services with minimal human supervision.

BETTER RETURNS

Funds using robo-advisors based on AI and algorithms reported a 14.76% average annual rate of return, far higher than the 9.24% logged by South Korean active equity funds, according to a local financial market tracker FnGuide Inc.

The global robo-advisor market is forecast to more than double to 7,700 trillion won ($5.8 trillion) by 2027 from 3,270 trillion won in 2022, according to accounting giant PricewaterhouseCoopers (PwC).

Mirae Asset aims to apply AI technology to various investment products for global expansion, Park said.

“AI is essential to efficiently allocate assets and launch innovative products earlier than others,” Park said. “AI itself is a global business now.”

“Many investors are still paying significant fees for products and services,” he said. “AI is likely to provide potential solutions to dramatically lower those expenses and change the future of finance.”

GLOBAL EXPANSION

Mirae Asset, which in 2003 became South Korea’s first asset manager to start a global business, has been expanding its overseas markets of late.

“The era of allocating assets only to those in Korea was over,” Park stressed. “AI is a must to build efficient portfolios with diversified investment assets across the world.”

Mirae Asset acquired Australia’s robo-advisor Stockspot at $18 million in August 2023 while applying for WealthSpot's trademark to the US Patent and Trademark Office in January.

The South Korean financial group aims to accelerate its global AI business centered on WealthSpot, Stockspot and the conglomerate’s Indian unit. It established Mirae Asset Capital Markets (India) Pvt. in 2018.

“We will launch various AI businesses worldwide,” Park said. “We plan to install an intelligent AI platform throughout the organization while using strong technologies responsibly throughout our work.”

WealthSpot is set to coordinate the AI financial strategies of overseas subsidiaries and lead the synergy of the group’s innovative technology.

The core overseas units plan to actively seek AI talent, Park said.

“WealthSpot in the US and Stockspot in Australia are poised to lead the recruitment of global AI talent,” he said.

RETIREMENT PENSION MARKET

Mirae Asset Group has already been providing various AI services, targeting the local retirement pension market, which is estimated at 400 trillion won.

The group completed developing 14 AI algorithms dedicated to retirement pensions including for asset allocation and thematic products. Those algorithms passed a testbed evaluation by Koscom, which is under the control of the Financial Services Commission.

They will be introduced for trial robo-advisors for discretionary investment services for retirement pensions as soon as the second half after the regulator’s review.

Mirae Asset Group has already attracted 1.4 trillion won from pension clients as of May through its robo-advisor retirement pension services.

South Korean financial companies have been heavily investing in robo-advisors as discretionary investment services with virtual financial advisors will be allowed for retirement pension investment from the end of this year.

Samsung Asset Management is developing a system to expand AI, which had been used only for corporate clients’ wealth management, into individual pension customers. The system is set to automatically adjust asset allocations after AI learns financial data in addition to the existing quant models.

Midas Asset Management and Life Asset Management introduced AI systems, which provide analysis of global corporate filings to fund managers in real time.

Write to Ma-Su Choe at bebop@hankyung.com
 
Jongwoo Cheon edited this article.