The Future of Asset Management: Today's Challenges

With the global pension shortfall now estimated at $41 trillion¹, continuing changing demographics and evolving requirements for increasingly tech-savvy investors are forcing the industry off the starting blocks in its digital transformation to improve customer engagement and demonstrate performance. While data and increased use of technology is front and centre of addressing these challenges, meeting the cultural changes resulting from this shift will be equally as important to ensure a successful transition.  The challenge for the industry will be to achieve this in an environment of increasing focus on costs and operational efficiencies, growing consumer demand for improved transparency and accountability as well as escalating regulatory scrutiny.

Data quality is paramount as is access to, and portability of, data. The current investment cycle is maturing in a period of radical geopolitical change and the increasing level of data from multiple sources makes it extremely challenging to read through the noise and hone in on what matters to ensure not only the right instrument is selected but also the correct timing.

The challenge for the asset management industry may never have looked greater, but neither has the opportunity for success, provided the industry is prepared to meet the level of change now required. Investment in data and analytics is the first step towards essential digitalisation of the industry. The threat of artificial intelligence (AI) wiping out the asset managers is overdone – AI will not replace asset management, but those who invest in technology will undoubtedly replace those who do not.

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By Rebecca Healey, Head of Market Structure + Strategy, EMEA

  1. https://www.genevaassociation.org/sites/default/files/research-topics-document-type/pdf_public//pensions_epidemic_summary_final.pdf

Harrison Short