07 December 2020
The potential for technology to reshape the asset management industry has come into sharp focus in recent months. Catalysed by Covid-19, asset managers are stretching their capabilities, tapping into the value of disruptive technologies like automation, artificial intelligence (AI), machine learning and analytics. They are preparing for the short-term and are developing seamless operational processes that can effectively overcome future shocks of their business functions.
Recently, operational resilience has become an increasingly pertinent phenomenon, where firms are emphasising the delivery of immediate value, business agility and substantial efficiency gains. While cost-cutting remains a high priority for asset management firms, differentiation and longevity will become the central elements of the future operating models, enabling better anticipation of the disruption and evolution of the asset management industry.
Companies will bolster the use of cloud computing to scale the business, support durability and reinforce security to adapt to the emerging trend of “technosphere”. Firms are expanding their use of automation and artificial intelligence, eliminating manual processes and allowing algorithms to take more control. Firms are harnessing the power of data by standardising operational processes and strengthening governance, honing the ability to collect and analyse data for the generation of actionable insights. Notably, the widespread availability of NLP (Natural Language Processing) applications will expand its use across the asset management industry. Why is this so? Asset management is a scale business; it is a winner-takes-all game. Embracing NLP technology by connecting your data and people allows firms to take advantage of efficiency enhancement and insight generation, making impactful, data-driven decisions that are crucial to any business.
While the overarching objective of maintaining operational resilience and organisational nimbleness pushes asset managers to embrace emerging technologies, cost-effectiveness remains to be a priority. Asset managers will place fee pressure on software providers, increasing scrutiny upon the justification of their fees. It may prompt consolidation among service providers to generate a one-stop technological solution. It is also worth noting that while technical skills are vital to promoting organisational agility, human talents are equally important. The “softer” skills should not be underinvested in the new normality, as they play a significant role in motivating and managing teams for technological integration across firms.
Wyman, O., 2020. Asset Management-10 Trends For 2020. [online] Oliver Wyman. Available at: https://www.oliverwyman.com/our-expertise/insights/2020/jan/asset-management-10-trends-for-2020.html [Accessed 29 October 2020].
Kerrigan, M., 2020. COVID-19: The Now And The Next For Asset Managers | Accenture Capital Markets Blog. [online] Accenture Capital Markets Blog. Available at: https://capitalmarketsblog.accenture.com/covid-19-asset-managers [Accessed 29 October 2020].
Wyman, O., 2020. Asset Managers & Wholesale Banks – Searching For Growth In An Age Of Disruption. [online] Oliver Wyman. Available at: https://www.oliverwyman.com/our-expertise/insights/2019/mar/wholesale-banks-asset-management-analysis-2019.html [Accessed 29 October 2020].
Morgan Stanley. 2020. Is The Pandemic Accelerating Digital Disruption? | Morgan Stanley. [online] Available at: https://www.morganstanley.com/ideas/coronavirus-tech-disruption [Accessed 29 October 2020].
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