{"id":1731,"date":"2022-12-01T11:44:00","date_gmt":"2022-12-01T11:44:00","guid":{"rendered":"https:\/\/digiterrebestg.wpengine.com\/?p=1731"},"modified":"2024-05-29T14:27:08","modified_gmt":"2024-05-29T14:27:08","slug":"is-a-lack-of-technology-vision-inhibiting-transformation-of-the-asset-management-industry","status":"publish","type":"post","link":"https:\/\/www.digiterre.com\/us\/2022\/12\/01\/is-a-lack-of-technology-vision-inhibiting-transformation-of-the-asset-management-industry\/","title":{"rendered":"Is a lack of technology vision inhibiting transformation of the asset management industry?"},"content":{"rendered":"
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Is a lack of technology vision inhibiting transformation of the asset management industry?<\/h1>\n\n

The asset management industry has not been at the forefront of technology innovation. But now digitalisation offers differentiation and resilience against competition. So what is holding the sector back from transformation?<\/p>\n \n <\/div>\n<\/section>\n\n\n

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2021 was a good year for the asset management industry. Against a backdrop of rising markets and improved net inflows, driven mainly by strong performance in equity markets, many asset management firms saw significant increases in AUM. In fact, the asset management industry hit a record of $126 trillion in total assets as 2022 began. But the 2022 combination of socioeconomic uncertainty, regulators with laser-like focus on providing value for money and sustainable finance have bought fresh obstacles to overcome in an increasingly competitive market. Not to mention inflation and its effect on previously strong performing assets. <\/p>\n\n\n\n

For a sector that has historically lagged behind in its adoption of technology, digitalization offers a means to differentiate and entrench a competitive position. But according to a 2021 survey, 65% of asset management respondents said they had experienced a \u2018significant uptick over the past year of employees departing for technology companies.\u2019 They also noted that their firm found it difficult to recruit top software and data science talent.\u00a0\u00a0<\/p>\n\n\n\n

It seems reasonable to speculate that scarce tech talent will always opt for simulating, growing environments where there is an opportunity to add value, where technology is integrated as part of the business, and not seen as a silo. For these reasons, the asset management sector is typically not viewed as a career move for ambitious technologists. <\/p>\n\n\n\n

Enabling business transformation requires vision amongst senior leadership and a desire to change. Inspiring others to go on that journey attracts talent to make it happen. So is the lack of available talent now holding the asset management industry back from digitalization? Or is it the inherent lack of vision amongst senior leadership on how to use the available talent and technologies to effect the necessary transformation? To substantiate \u2013 or disprove \u2013 this point of view, we need to look at what has changed and how the sector has responded.\u00a0<\/p>\n\n\n\n

What\u2019s changed?<\/strong> <\/h4>\n\n\n\n

Given today\u2019s market conditions, clients\u2019 needs will continue to evolve alongside their expectations for consumer-grade digital experiences, products, and services. <\/p>\n\n\n\n

The pandemic acted as an accelerator to digital transformation but most asset management firms have failed to keep pace with investors\u2019 needs, partly due to a continued lack of investment in the technologies required to keep pace.<\/p>\n\n\n\n

The change in investor needs and service expectations has not been driven purely by the pandemic. This has taken place over a longer time frame, evolving over the past 15-20 years as omni-channel digital experiences and interactions, along with expectation of real-time data accessibility have become the norm. As a result, clients of asset management companies are now more complex, demanding of real-time investment information and insight, intolerant of obfuscation of data, time constrained and more diverse in nature and needs than ever before.  <\/p>\n\n\n\n

These changes are reshaping client engagement models which have traditionally been labor intensive, linear, transactional, and highly profitable. Interactions are driven by individuals but built on standardized engagement models without much customization or flexibility. Discussions and interactions focus on packaged products and post transaction client communication is mostly reactive. In the era of hyper-personalization, these old models are inadequate and ripe for competitive disruption.\u00a0\u00a0<\/p>\n\n\n\n

Providing the type of digital client experience that improves client acquisition and retention requires technology investment in data, emerging technologies such as AI and machine learning, analytics and digital client platforms that are accessible and easy to use. Digital transformation is no longer a nice to have, it\u2019s a necessity to differentiate client service, improve asset manager productivity through use of digital tools and to provide digital solutions for investors, accessible in real time.  <\/p>\n\n\n\n

 New standards in client engagement<\/strong> <\/h4>\n\n\n\n

With asset management clients more capable and willing to change firms in a heartbeat, client engagement through personalized communications and servicing plays a fundamental role in successfully building trust, long term relationships and maximizing customer lifetime value.\u00a0 Digital tools and access to data insights enable:\u00a0<\/p>\n\n\n\n