Dr Michael Xu, a DBA graduate in 2020, is the CEO and CIO of United Great International Investment Ltd, an asset management firm. With his diverse professional background in engineering, IT, and finance, Dr Xu has been at the forefront of adopting AI technologies to improve business performance and deliver value for his clients. He sat down to talk to FB Magazine about the impact of AI on the financial services industry, the benefits and challenges of AI-driven investment analysis, and to offer guidance for aspiring DBA students in the era of AI.

Can you briefly share with us your professional background? How did you come to work in the asset management sector?

“I graduated with a bachelor of civil engineering and started my career in the construction and engineering industry in China. But my real interest was in IT and computer programming. In the early 2000s, the internet revolution gave me the opportunity to manage computer and software engineering for construction projects in my company. That enabled me to gradually shift my career focus towards IT engineering, and I moved into IT-related management positions in companies in China and Japan.

“From there, I went on to pursue an MBA in the Wharton School of the University of Pennsylvania to keep up to date with the latest knowledge in technology management. After graduating, I switched careers again – this time to the financial industry. I remained in the U.S. and joined J.P. Morgan, where I worked in the wealth management division for three years to gain first-hand investment experience.

“Given my background and understanding of the Chinese market, I then decided to relocate to J.P. Morgan’s Hong Kong office. I’ve continued to work in the asset management sector in Hong Kong until now.”

You’ve gained a reputation as a pioneer in adopting AI technologies. Why is AI so important for the financial services industry?

“AI is a game changer for the financial services industry. I think it will have a much bigger impact on society than the internet revolution two decades ago. We’re witnessing nothing less than a new technological revolution. The business landscape has evolved and it’s crucial for businesses to find new ways to position themselves as digital technologies rapidly innovate and transform.

“AI is bringing both new competition and new opportunities to the global financial services industry. Financial services companies are facing increasing competition to adopt AI technologies in their products and services. But at the same time AI will also create more opportunities for SMEs and new tech start-ups to attract investors and grow their businesses. I think we’re likely to see new fintech giants emerge as we enter the AI era, perhaps similar to the emergence a generation ago of the ‘Magnificent Seven’ tech giants like Apple and Microsoft.”

What about individual investors?

“Yes, AI is affecting individual investors as well as financial services companies. On an individual level, AI can help investors – everyone from ultra-high-net-worth individuals to ordinary working people – manage their personal wealth and make smarter investment decisions.”

Taking your company as an example, what are the key benefits and challenges for asset management firms that adopt AI tools to augment investment analysis for their clients?

“Let’s start with the benefits. First, adopting AI tools has greatly increased the amount and scope of data that we can analyse. Before we adopted AI, we collected mostly quantitative data via Bloomberg. But tools such as Open AI’s ChatGPT-4 and Google’s Gemini mean that we can now access not only quantitative data but also images, video, and audio. That means we can process more data, and use it more effectively. That improves our competitive advantage over more traditional asset management firms.

“Second, adopting AI tools has made us better at understanding data, and making investment decisions based on it. Now that our portfolio managers can access a wealth of AI-driven quantitative analysis, they can use it to design more tailored investment services to meet our clients’ goals at a lower cost.”

And the challenges?

“Traditional asset management firms used to gain a competitive edge by investing long-term in assets, human capital, and R&D. That route to competitiveness is weakening due to the widespread adoption of AI. For example, my company previously used advanced computer programming techniques to develop our own quantitative trading system. But now we can do the same far more efficiently simply by using AI tools. As the use of AI tools spreads, new competition is appearing in the market. If traditional asset management firms don’t adapt, they risk losing their competitive edge. They’ll be replaced by competitors that are faster to exploit new opportunities to work with AI technologies.”

What other practical applications does AI have in the financial services sector? For example, given the global trend towards investing in more sustainable assets, does AI have applications in green finance?

“Yes, AI and green finance are a perfect match. AI tools can help both financial services companies and individual investors address sustainability and ethical issues. With AI tools, they can analyse complex data faster and easier, and design ESG investment strategies that suit their own goals and values. This is why we can already see both companies and individuals adopting AI tools to improve decision-making.”

You’re keen to stress that companies need to work out how to embrace AI technologies and make them work for them. As a PolyU alumnus, what more do you think the University can do to prepare students to enter a working environment where AI skills are soon likely to be essential?

“Mastering the practical application of AI tools will be a core skill for the future workforce in Hong Kong and beyond. That means it’s important for PolyU to continually update its curriculum to reflect the constantly-evolving impact of AI tools in the business world, and make sure that students are equipped with the latest technological know-how. If PolyU wants to pioneer the incorporation of AI in tertiary education, it should focus on teaching students the practical applications of AI, whether for work or for other pursuits. In this way, it can help address shifting skill needs in the workforce and help shape Hong Kong’s future development as a regional tech hub.”

You mentioned shifting skill needs. Can you share how your experience of pursuing a DBA at PolyU helped you address your own perceived need to reskill?

“I decided to pursue a DBA at PolyU because I wanted to improve my research ability, understand technological advancements in-depth, and expand my business network. I’ve always believed that a successful career lies in one’s skills and knowledge: both require continuous attention and renewal. For me, that means keeping abreast of cutting-edge technologies and the latest market developments. The DBA provided an excellent environment to achieve this. It was challenging but ultimately very rewarding.”

Do you have any advice for aspiring DBA students?

“Know how to make the most out of the programme. Before joining the DBA, have a clear goal. Think about what you want to gain from it, and how you can benefit from it. You may want to improve your academic credentials by publishing research papers. You may want to integrate your new DBA knowledge and skills with your current professional experience to improve business operations, brainstorm new start-up ideas, or change careers. Or you may seek more networking opportunities and possible business collaborations with peers from diverse backgrounds. Having a clear goal of what you want to achieve will help you enjoy a more rewarding DBA experience.

“Also, learn how to balance your work life and your study life. My tip for effective time management is to set a clear timeline for each task and stick to it. It will help you set clear priorities and directions for your DBA study.”

As a PolyU alumnus, do you have any recommendations to help the University increase alumni engagement and networking?

“First, organise regular online alumni events so that we can network with other alumni and PolyU academic staff no matter where we are in the world. This will build a stronger alumni network, promoting synergy and better integrating PolyU’s alumni resources. And second, work with the public sector to organise a range of alumni events that enable alumni to make a positive contribution to society by sharing their knowledge.”

Finally, what qualities do you believe are essential for developing a successful career in any industry?

“Everyone needs three essential qualities. Be ready to adapt to different cultures and to changes in the business environment. Be hungry for knowledge and keep up to date with the latest market trends. And know how to grasp new opportunities such as AI tools as they arise.”