These are days to be optimistic if you are an Asset Manager. And this is not just because the industry has been doing well and the fundamentals remain strong going forward. The future looks bright because the same technological forces that are being so disruptive, present an equal number of opportunities for those who are prepared to embrace change.
It is clear that Asset Managers have to juggle an increasing number of challenges: on the one hand, as passive funds grow ever more popular, pressure on prices increases thus reducing fees for active funds and ultimately causing a decline of revenue margins. This dynamic is exacerbated by the emergence of new digitally-savvy boutiques. On the other, an increase in the level of sophistication of clients is in play: as they demand more complex and tailored solutions, firms have to invest in people and technologies to keep up with the pace of change. Agile and client-oriented technology is key to support asset manager and saving actors to face multiple investors requirements and continuous growth objective.
To complete an already uncertain picture, asset managers, institutional investors, distributors and wealth managers must also contend with the burden of far more onerous regulations. This is particularly true in Europe, where rules such as MiFID II have augmented the task for firms, both in terms of the amount of human resource that must be deployed to ensure compliance, and the need to make Portfolio Management Systems (PMS) more sophisticated and transparent.
However, while many will blame technology for some - or most - of these ills, technology is in fact part of the solution. It is thanks to digitisation that players will manage to solve some of these issues and keep up with the latest digital trends that have so deeply transformed the Asset Management Industry over the last decade. And today, we are no longer talking about a rapidly changing environment in which financial institutions evolve, but rather a full paradigm shift, which opens up a whole series of opportunities for those who move swiftly and decisively. As it became apparent during the COVID crisis, companies will need an efficient technological infrastructure, that proves to be scalable, secured, and cost efficient in the first place as well as the agility and capabilities to bring solutions that add value to users and customers quickly.
To do so, they will need to continue fine-tuning the ongoing investment in technology and innovation or partner with a trusted, cost-effective, robust and scalable technology provider so that they can integrate the newest technologies in their offering. This technology wave features prominently:
– Cloud and Open Source Solutions
– Robo Advisor
– Cyber Security
– Machine Learning & Artificial Intelligence
– Natural Language Processing (NLP)