1996 Called. It Wants Its Tech Back.

Somebody, somewhere, could be reading these words on a phone while his or her car drives itself down the freeway. Perhaps the driver (or, rather, the passenger) is headed out on a date — set up by an algorithm — and was alerted to this article because an artificially intelligent newsbot on a social network determined it might be of interest. This is the incredible world in which we now live.

Equally impressive, at least to me, is the speed with which we integrate new technologies and discard old ones. Someone told me recently that he loves his new Apple Watch because he doesn’t have to reach for his phone anymore to check the time. The time, he said with a straight face, is right there . . . on his watch.

Wow.

To be fair, I’m not immune to this kind of short-term memory when it comes to technology. I’m currently sitting on an airplane, checking websites and responding to e-mails. I fully expect onboard Wi-Fi and — I’ll admit it — would have been annoyed if I weren’t able to connect to the Internet while going 500 miles per hour at 35,000 feet.

But while we as a society may be very good at adding new, and dropping old, technologies, we as an investment community are most assuredly not.

A few months ago, at a conference with 60 of the world’s largest pensions and sovereign funds, I asked the audience, “How many of you have added a new piece of technology into your investment decision process over the past 12 months?” Fewer than ten had done so.

As it turns out, a list of today’s dominant investment technologies reads like it’s from the 1990s: Excel, PowerPoint, e-mail, Bloomberg, Yahoo Finance, mobile phones, messaging applications, and databases such as Oracle. All of these technologies — literally all — were available in 1996. The investment community is not utilizing the technology of tomorrow or even today. It’s stuck with the technology of yesterday.

Why? I have some ideas. And my explanation as to why most Giants are mired in the previous century has four key propositions rooted in the behavior of four key stakeholder groups:

Institutional investors: In 2016, I gave a keynote at a conference for nonprofit investment organizations. Of the 300 or so in the room, 76 percent indicated that they believed their world would be upturned in the years ahead by technology start-ups. In light of this, how many do you think had some sort of a formal policy in place to track start-ups and technologies that could change their business? Zero.

Asset managers: Given the above, most Giants are totally reliant on their service providers to invest in the latest technologies that can deliver higher investment performance. As a result, the hot new tech is built (or at least used) by people who have no interest in sharing it; they instead leverage it to extract higher fees. Most of the really valuable investment technology seems to go into black boxes behind closed doors or secretive asset management businesses, purposely hidden away by organizations that have no interest in its widespread adoption. Rather, they seek widespread subscription to their funds.

Venture capitalists: The asset management industry generates 40 percent profit margins. Success within that field is entirely dependent on informational advantages related to the processing of data and information. In other words, asset management is both ridiculously profitable and remarkably vulnerable to technological disruption. And yet I can’t name a single venture capital firm that specializes in invest-tech. Consequently, entrepreneurs don’t consider this a sector where they can be “venture backed.” And they’re right.

Entrepreneurs: Tech entrepreneurs are barely aware that the Giants exist. I’d wager that every entrepreneur who has ever considered building some new technology to augment investment decisions or generate investment alpha has been asked, “Why don’t you just start a fund instead?” Put simply, most technologists aren’t building technology for mass consumption by the investment community because Giants rarely come looking for innovative companies with which to partner.

The complacency of Giants has disempowered entrepreneurs (and their venture backers) from helping to solve big investment problems of high value. At the same time, the Giants have empowered asset managers to use technology as a means of extracting higher rents.

If we ever want to see our pension funds using self-driving portfolios or algorithms that introduce pensions to managers and deals, we need to break down these silos and bring these communities together in environments where all can learn about one another. We also need institutional investors to start being much more proactive about their technology and help transition invest-tech innovation out of asset management firms and into actual technology firms. To accomplish this, they need to meet with new start-ups just as they meet with new asset managers. They need to study emerging technologies just as they study emerging markets. And they’ll need to start taking their own data, so long ignored, much more seriously.