How Digital Technology Is Supporting Asset Management.
In asset management, managing client wealth and investment portfolios relies on carefully balanced strategies for managing and reducing risk to maximise returns. Asset managers must keep ahead of rapidly shifting market trends, react quickly to investment and divestment opportunities and manage regulatory, governance and compliance requirements.
In recent years, asset managers and investment managers have tentatively adopted technology solutions to digitise processes, manage data and analyse the market. Historically a paper-based process industry, with great knowledge and insight sat with key people in the business, this tech shift has been slower to gather momentum than consumer-focused financial service organisations.
Microsoft leader, Satya Nadella commented this year, “We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security—we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”
Asset Management, like the rest of the financial services marketplace, is going through this intense technological shift. The pandemic has only accelerated tech implementation and user adoption across the entire Financial Services industry.
For asset managers, digital disruption in a mid-pandemic world is enabling better investor engagement, providing smarter data management and providing rich insights, as well as AI-driven decision making and reporting. With automations connecting workflows between the front, back and middle office, asset managers will find their time freed up for hands on, high value tasks that impact investor relations and increase portfolio success.
Whilst there are no one size fits all technology change model to suit all asset managers, there are some common themes and solutions that are vital to keeping pace with the rest of the sector. Key technology trends impacting asset management in the months and years ahead include:
Big data and a single source of truth
Asset managers are often tapping into large amounts of market, client and portfolio data, across different asset classes, hosted in disparate legacy systems. Historically hosted on spreadsheets, technology solutions and big data management systems can integrate and unify this data into a single source of the truth. With real time data constantly fed into the system, rich data insights feed better decision making processes. Business applications and CRM solutions are at the heart of digital transformation in asset management, helping managers assess and evaluate risk, access opportunities in real time and model next best actions for assets that are about to peak.
Artificial intelligence and Machine Learning
Big data is the foundations on which to build the next phase of digital disruption in asset management. With data sanctity, naming conventions and unified data services taken care of, AI can tap into that data to recommend next best actions on funds, offer robo-advice and measure key sustainability outcomes in terms of ESG and diversity. The beauty of these systems? They are constantly learning with each and every decision made and the bigger the data picture created.
RPA and workflow automations.
Process automations in asset management have the potential to completely revolutionise the working day. Building automation and workflows between legacy system removes the need for manual rekeying and needless repetition of manual tasks across the business. There are limitless possibilities for automation and how unique they can be to each individual organisation alongside data and process standardisation that can be adopted across the board by the industry.