ClearPoint recently hosted our third Leaders of Funds roundtable in Sydney, bringing together a group of industry peers over lunch to share knowledge, identify opportunities and discuss challenges facing the investment management industry.
We presented a review of key investment management sector trends: 1 assets under management are expected to surge from US$ 64T in 2012 to US$ 102T by 2020; costs are rising due to regulatory compliance requirements; pressure on fees will continue with greater competition and demand for transparency; and investment in technology and data management will become mission-critical to maximise opportunities.
Technology is advancing and customer expectations are changing as result
With the rise of digital devices, clients are demanding first-hand digital services and greater value from interactions with advisors.2 For instance, there is growing popularity of the ‘robo adviser’ business models that automate financial advice, asset allocation and provide added value at lower cost. Technology will be the driver for delivering engaging customer interactions, and companies at the forefront of digital services will reap the rewards of customer loyalty.
By 2020, technology will have become mission-critical to drive customer engagement, data mining for information on clients and potential clients, operational efficiency and regulatory and tax reporting. By 2020 most global asset managers will have a chief digital officer (CDO).
PwC Asset Management 2020 Report
Data management is an untapped opportunity
Companies are struggling to maximise value from their data systems. 93% of asset managers believe data and analytics will be a high strategic priority in the future, yet only 14% are confident in their ability to extract investable insights from a large volume of data.2 These figures show there is an untapped opportunity for Enterprise Data Management (EDM) to drive business value and competitive advantage.
Our guests had varying views on how best to manage their data and to maximise value beyond operational information and gain real business insights via predictive analysis. Our view is that EDM is made up of Technology, People & Process – all equally important. It’s about having the right infrastructure, applications and systems in place, combined with business processes to ensure efficiency and compliance, and then putting the right people in to manage the entire data lifecyle to drive successful business outcomes.
Looking to the future of investment management
All guests agreed there’s no shortage of challenges down the road for investment management. Data sovereignty, governance and regulatory compliance remain priorities. As does security, with plenty of discussion around why we need it and its implication on the uptake of cloud services. There was also concern around disruptive technologies displacing current business models and established industries.
“Lots of things are being trialed and big infrastructure can be knocked out of the water by a very simple idea,” said one COO.
Technology alone is not a solution to these challenges, but it can be a key enabler for transformation. To prepare for digital disruption, investment management companies need to push themselves to become digital organisations via sound strategic objectives and an actionable roadmap.
ClearPoint can help. We enable digital transformation by providing our clients with agile, user-centred solutions that support the continuous delivery of engaging customer interactions. We’ve also developed a data management platform, AlphaCert – www.AlphaCertLabs.com, specifically to address the needs of the investment management sector.
Like our Leaders of Digital roundtable, Leaders of Funds was informative and valuable, with everyone taking away new insights and ideas to help overcome pressing issues.
Thank you to our guest speaker Jeremy Hill, Head of Investment Office, Accident Compensation Corporation Investments (ACC) New Zealand, our faciliator and ClearPoint Associate David Oakes of the Australian Graduate School of Management (AGSM), University of New South Wales, and all the business leaders who joined us for this lively session.
Sources:
- PwC Asset Management 2020: A Brave New World
- Economist Intelligence Unit survey, published by State Street, 2015