In 2020, the touch of tech is omnipresent. Without significantly limiting yourself, reliance on technology cannot be avoided. Nor can its rapid expansion and development. So where should asset managers be focusing their time and efforts? We’ve broken it down into five technological areas or developments that asset managers cannot allow themselves to ignore or fall behind on. Throughout, one thing has remained clear: technology has become mission critical to driving both customer engagement and growth.
RegTech (Regulatory Technology) within the FinTech sphere is promising to have more scope than previously. By the end of this year, there may be advancements within RegTech that enable regulators to access the investment portfolios of asset managers in real-time. Gaining this access allows for real-time cross-referencing between portfolios and market data. This would support regulatory oversight by enhancing transparency over market conduct and product appropriateness.
2020 is going to see the introduction of even greater regulations to align asset management with the needs and interests of the customer with the introduction of the UK Stewardship Code 2020. By the end of this year, we can expect to see almost all major territories enforcing regulations about fee models. Global acceptance of fee transparency as necessity indicates that, alone, it may be the bare bones. Asset managers will increasingly need to show what the UK FCA called ‘value for money’ in its 2018 Market Review, in addition to keeping their fee models crystal clear. Firms will need to embrace tech as an enabler of transparency, using it to better respond to FCA interest and portfolio review.
Big Data is a big topic with big implications. Data has been hailed as the ‘Oil of the 21st Century’ for years now, but, in 2020, that will prove steadily more true. Asset managers will need to show significant insight into the needs and behaviours of their customers. With improved data access and analysis, asset managers can better align their propositions to reduce friction and increase the flow of information amongst various teams. Increasing interest in personalisation and insight will require asset managers to embrace data flow across the organisation as part of a robust digital intelligence infrastructure which must also include monitoring, dashboards and process flows.
This deeper understanding of an asset manager’s customers creates opportunities for organisations to deliver more efficiently and to increase fund flows. In addition, it creates awareness into how best to retain existing clients. Utilising data effectively is imperative for asset managers to consider throughout 2020.
In 2020, most firms have adopted social media as part of their wider business outreach and marketing. Social media has become a mainstay in every business, most finding it difficult to create brand awareness without embracing its utility. However, asset managers everywhere can be using it more effectively. Although necessary for carving space for a brand, social media can be beneficial far beyond that. By introducing social listening and pairing it with the integrated systems developed through focus on Big Data, asset managers will be able to identify emerging client needs or trends by gathering and analysing what is said on social media. The information gained here can be used to create timely offers or develop propositions. Either way, social can be used as an insight generation tool as well as one for outreach.
Beyond using data to increase the efficiency of asset manager activity, there will need to be systems in place that allow for the ability of the firm to grow and scale. By creating an environment that better caters to specialisation of needs for the customer, technology will pave the way for asset managers to grow their firms at speed. However, that same effectiveness must be able to continue cohesively at scale. Instead of using legacy systems that no longer have the ability to stretch, either in terms of data or integration, firms will have to ensure that the systems they have in place will be able to grow with them.
As asset managers in all territories begin to embrace the technologies above and gather the data they need to better understand their clients, one trend is likely to stand out. Clients want more solutions that are better suited to their individual needs rather than general solutions. Clients will be clamouring for asset managers to create bespoke, integrated products that work for their busy, varied lifestyles and goals.
There is an increased likelihood that the roles of Chief Digital Officer (CDO) and Chief Integrations Officer (CIO) will be seen within global asset management firms. These roles have responsibility for developing a tech stack that enables firms to produce innovative and strategic solutions. This will include enhancing the organisation’s integrations strategy, the current usage of social, mobiles, and data collection. All of which will amplify asset managers’ ability to tailor to their customer.
That said, embracing tech will only get you so far if the platform on which you’ve based your tech stack is flawed or outdated. Like fixing old wiring with a bit of gum, temporary patches are not a long term solution. If your current platform is not running at optimal levels, it may be time to invest in something new. As the base of all growth plans in 2020, ensuring a reliable platform is key.
The truth is, technology is a vital investment. In 2020, the landscape is more competitive and global than ever before and clients are looking for even more value from firms. Asset managers will be competing in the same space and regulators are investing in their own technological advancement. Only firms who are able to use their systems to collect data, analyse and scale will be able to succeed in this climate.
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