Portfolio Manager Insights

AI is rewiring the engine of finance

Fidelity’s Sammy Simnegar believes the financials sector is on the verge of a massive transformation, driven by the integration of generative AI.

By: Sammy Simnegar
Updated: 8/3/2026
Key Takeaways
  • By automating complex, time-consuming and dense workflows, financial institutions around the world are leveraging artificial intelligence to significantly improve efficiency, reduce risk and lower costs, according to Fidelity Portfolio Manager Sammy Simnegar, who sees this structural recalibration as likely to widen the gap between leaders and laggards.
  • “Generative AI is set to transform the financials sector, but its biggest impact isn’t in customer-facing tools,” says Simnegar, who manages Fidelity Advisor® International Capital Appreciation Fund. “The true value is being realized within the complex ‘engine rooms’ of global finance: back-office and risk-assessment frameworks.”
  • In helming the diversified international equity strategy since 2008, Simnegar favors high-quality growth stocks benefiting from long-term “mega trends,” as well as what he calls the three “B’s” – brands, barriers to entry and “best in class” management teams.
  • The global financial landscape is entering a period of structural recalibration, Simnegar notes, as major international institutions pivot from pilot programs to large-scale generative AI integration.
  • As an example, he points to sizable fund holding Mitsubishi UFJ Financial Group, which under the leadership of CEO Hironori Kamezawa has emerged as a frontrunner in the use of AI within the Japanese banking industry.
  • Specifically, Simnegar says that the firm has aggressively moved to automate its core administrative functions, aiming to reduce manual workloads through its internal “MUFG AI Platform.”
  • “Even more noteworthy, management has genuinely embraced this technology by opportunistically acquiring stakes in AI partners, including LayerX,” he explains. “In fact, the company projects that integrating LayerX’s AI solutions – especially in functional areas like sales proposals and customer financial data review – could save the bank about 200,000 work hours annually.”
  • Similarly, Spain’s Banco Santander has made major strides in applying AI to boost efficiency and enhance fraud detection throughout its global operations, according to Simnegar. He notes that the bank, another top midyear holding, expects these efforts to generate roughly €1 billion in savings and revenue by 2028.
  • “Furthermore,” he says, “its advanced monitoring systems aim to detect emerging threats, including deepfakes and unauthorized screen sharing, in real time, while machine learning helps identify suspicious transaction patterns commonly associated with financial crimes with greater accuracy, reducing false positives and allowing investigators to focus on higher-priority risks.”
  • Simnegar highlights Santander’s technological edge through its successful execution of Europe’s first fully AI-enabled end-to-end payment within a secure, controlled framework designed to ensure security and consumer protection.
     
Featured Fund

Fidelity Advisor International Capital Appreciation Fund (FCPIX)

Seeks capital appreciation.

View fund
Explore more on:
Active management Developed Markets Financials

Related insights

View all
Portfolio Manager Insights
Where I’m finding durable earnings growth
Fidelity’s Chris Lin is uncovering opportunities in three market segments where valuations do not fully reflect the potential for sustained earnings growth.
Portfolio Manager Insights
Investing in companies harnessing AI to transform their business
Fidelity’s Kyle Weaver favors companies that have already begun to successfully adopt the technology to help boost their growth prospects.
Portfolio Manager Insights
In seeking AI ‘winners,’ I’m staying flexible
An adaptable investment approach and valuation discipline are key to capturing opportunities in artificial intelligence, according to Fidelity’s Matt Fruhan.

For specific fund information such as standard performance and holdings, please go to the "Funds Managed" link on this page.

Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk. Nothing in this content should be considered to be legal or tax advice, and you are encouraged to consult your own lawyer, accountant, or other advisor before making any financial decision. These materials are provided for informational purposes only and should not be used or construed as a recommendation of any security, sector, or investment strategy.

Fidelity does not provide legal or tax advice and the information provided herein is general in nature and should not be considered legal or tax advice. Consult with an attorney or a tax professional regarding your specific legal or tax situation.

Past performance and dividend rates are historical and do not guarantee future results.

Investing involves risk, including risk of loss.

Diversification does not ensure a profit or guarantee against loss.

Sector funds can be more volatile because of their narrow concentration in a specific industry. Growth stocks can perform differently from other types of stocks and the market as a whole and can be more volatile than other types of stocks. Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time. • Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. • Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. • In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation, credit, and default risks for both issuers and counterparties. • Lower-quality bonds can be more volatile and have greater risk of default than higher-quality bonds. • Floating-rate loans may not be fully collateralized and therefore may decline significantly in value. • The municipal market is volatile and can be significantly affected by adverse tax, legislative, or political changes, and the financial condition of the issuers of municipal securities. • The securities of smaller, less well-known companies can be more volatile than those of larger companies. • The funds can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) that may increase market exposure, magnify investment risks, and cause losses to be realized more quickly. • Leverage can magnify the impact of adverse issuer, political, regulatory, market, or economic developments on a company. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Although the companies that the fund invests in may be highly leveraged, the fund itself does not use leverage as an investment strategy. Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry. In the event of bankruptcy, a company’s creditors take precedence over the company’s stockholders. Third-party marks are the property of their respective owners; all other marks are the property of FMR LLC.

935099.102
4B7B47200B3F4E2A8372E15967E83AF8