When you think of the contributing factors toward a company’s growth, do you automatically think of "technology" or "brand"’? In this post, we’ll look at the role each of the above plays and how vital they’ll be for the future of the investment management industry.
Leading asset managers are exploring how to use the latest technology to improve their business. In the face of increasing regulation and competition, they need to find new ways of differentiating themselves from their peers.
You invest in your brand by spending money on technology. The objective is to generate new value from investments in both new and old technology, streamline information access at all times in a single system, improve the client user experience, and increase end-user satisfaction.
Technology
Technology has always been a key difference, both favourably and unfavourably, between businesses and their rivals. The next stage of progress is smart technology, which opens up new possibilities. Smart technology makes it possible to delegate tasks in the field of asset management, which boosts productivity and puts more of a focus on solving future issues.
In the financial industry, products like Salesforce Financial Service Cloud enable your business to collaborate and engage with clients and one another like never before. Technology has also made it possible for people to access new opportunities, such as cryptocurrency, which has led to the need for new job categories, including crypto asset management, for example.
Additionally, many businesses have automated portions of their processes as a result of the emergence of robo-advisers, and AI and machine learning are becoming more and more ubiquitous. Technology has clearly altered asset management, but it still can't take the place of human expertise in all areas.
Implementing technology in asset management
The current asset management landscape is characterized by an exponential growth in data volume. This has resulted in a significant increase in the complexity and speed of asset managers' day-to-day operations. Technology’s key contribution to asset management has been efficiency. Below, we’ve highlighted two key areas that play an important role:
Automating data consolidation
Asset managers nowadays deal with a staggering amount of data. Manually crunching through that data is impossible. Systems, such as Salesforce and Mulesoft, make it possible to quickly and easily analyze that data and generate valuable insights for asset managers. Many actions that were previously completed manually or by applying rules based on human experience can now be automated with the use of advanced integrations and workflows. This lowers expenses while increasing effectiveness and quality of work across the board in the organisation.
System consolidation
To ensure that all efforts in asset management are coordinated and yield desirable results, processes and roles need to be approached efficiently. For instance, there would be an excessive number of inefficiencies and redundancies if each department was left to develop its own database, manage its information needs, and overall work in isolation. Businesses can easily combine all of their IT systems into one hub using a platform like Salesforce 360, giving them access to all of their enterprise data inside a single framework for better decision-making.
Brand
Many asset managers like to point to previous performance as an indicator of their reliability and capability. On the other hand, customers are interested in an asset manager’s transparency, leadership qualities, and analytic skills. If asset managers can't show that they will be productive moving forward, how well they performed in the past is of little help.
Stakeholder-focused brands will be more desirable in the future because they will be perceived as being better aligned with clients’ values and therefore more trustworthy. As such, ESG brands are likely to experience higher customer loyalty than those without them.
Additionally, technology allows an asset manager to track its performance more efficiently and deliver value without compromising on strategy or integrity (which is sometimes necessary when a new product has to be introduced). Technology can also help clients better understand and manage their active risk, improving their overall experience with the company.
Critical considerations for a brand
As mentioned above, a brand with ESG goals at its heart will be more desirable to clients searching for the right qualities in an asset management company. Such managers, who prioritise positive environmental, social, and governance practices, will generate more confidence among investors and other stakeholders.
Furthermore, the sustainability aspect of ESG aspirations complements the future outlook clients wish to see in asset managers. Sustainable activities, goals, and considerations prove that an asset manager has your best interests in mind. This makes it easier for them to attract new clients and retain existing ones, which should help generate higher returns over time.
Conclusion
The future of asset management - distribution, marketing, research, etc.—will be digital, but the industry is still in a transitional period. Technology and data continue to evolve at an incredible pace, meaning asset managers will have to adapt their business models accordingly.
Both technology and brand are important, and asset managers that are anxious to match their practices and values with the appropriate technology and embrace the appropriate brand strategy will enjoy greater success in the market.
Combining both established methods and cutting-edge technology like artificial intelligence and machine learning will shape asset management in the future. To successfully invest on behalf of clients, an asset manager must be able to comprehend and interpret massive volumes of data as well as how the markets and investors are acting.
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Today's post is from our Director of UK Sales & Alliances, Lee Clark.
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