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Asset Management Industry - Challenges and Opportunities

Will advances in technology help ease the pressure?

Notwithstanding recent market turmoil, the asset management industry faces challenges on a number of fronts. Fee income remains under pressure from the wider adoption of passive products, while an increasing regulatory burden and rapid churn in  technology can push up the cost base. Client expectations have become higher too, bringing additional costs and complexities.

However, technology may also offer a potential solution. The use of artificial intelligence  (AI) and the ability to harness its use to gain insight from alternative data may lead to operational efficiencies, lower costs and better performance. Technology may also assist asset management firms in accessing new investors or  designing new, cheaper products.

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REGULATORY PRESSURES ON ASSET MANAGEMENT FIRMS


Video: Preparing for the Next Wave of Asset Management Regulation (State Street, 2020)

State Street notes that regulatory complexity is only increasing and have produced their 2019 Regulatory Research Study, available from Meredith Kaplan, Head of the Analytics and Insights team.

Financial Markets Regulatory Outlook 2020 (Deloitte)

The annual assessment from Deloitte's EMEA Centre for Regulatory Strategy explores regulatory themes and trends that are likely to shape the financial services industry in 2020.

EU Regulatory Insights Q1 2020: An overview (State Street)

State Street's in-depth quarterly report provides detailed information about legislative and regulatory developments in the European Union.

Evolving Asset Management Regulation: A sea of voices (KPMG, 2019)

KPMG notes the range of external pressure groups that are influencing the regulatory agenda and increasing expectations for the asset and fund management industry. It suggests that the industry needs a rethink of its mind-set and investment offerings if it is to escape relatively unscathed.


TECHNOLOGY AND ASSET MANAGEMENT


How Asset Managers Can Derive More Value from Digital (KPMG, Dec 2019)

KPMG notes the significant challenges for the asset management industry from new competitors, lower-fee income as a result of the growth of passive investing, and the rising costs and complexity of regulatory compliance. They suggest that digital solutions may provide relief from these pressures, but it has to be delivered precisely.

How technology will redefine relationships with asset management clients (Deloitte, 2020)

Deloitte's paper examines four of the primary considerations that asset managers need to heed now, if they are to remain competitive and at the leading edge of an evolving industry.

AI applications in financial services (Hermes IM, 2019)

Federated Hermes outlines the positives and negatives associated with the application of artificial intelligence in three areas of financial services, asset management, banking and insurance.

An Introduction to Machine Learning for Investment Management (Man AHL, 2019)

Man AHL explores how artificial intelligence (AI) particularly machine learning, can be beneficial in an investment management environment where 'big data' sets abound.

AI Pioneers In Investment Management (CFA Institute, 2019)

The CFA highlights the opportunities, but also notes the limitations of AI in investment processes, and the significant role human intervention plays in the investment process.

Machine Learning for Investment Managers (SimCorp, 2019)

SimCorp examines the use of artificial intelligence within the investment management industry through four innovative cases.


GLOBAL ASSET MANAGEMENT INDUSTRY


Asset Managers Face Challeging Future (Bloomberg, 2019)

The prospects for the asset management industry are investigated by a trio of reporters from Bloomberg.

Asset Management 2025: The future of the asset management industry (Simmonds & Simmonds/Bloomberg 2019)

In this joint survey of almost 2,00 professionals by Simmonds & Simmonds and Bloomberg, they unveil the expectations for financial performance across the sector for the next several years.

Trends in Insurance Asset Management (SimCorp, 2020)

In this roundtable hosted by SimCorp, leading insurance asset management players discuss recent trends across the industry.

Global Asset Management Industry: Will these '20s roar? (BCG, 2019)

BCG sees both challenges and opportunities for the asset management industry in the 2020s, particularly as technology moves to become an integral part of both front and back-office functions.

Adapting to a new normal in European asset management (McKinsey & Company, 2019)

McKinsey tests the waters surrounding The European asset management industry and decides that a multi-pronged approach is likely to be most successful. Be bold and proactive!

North American Asset Management in an Era of Unrelenting Change (McKinsey & Company, 2020)

McKinsey takes a look at the North American asset management industry, and finds an industry beset with challenges and in structural transformation.

2019 Investment Management Fee Study (Callan)

Callan's 2019 fee study, only its eighth in over 30 years, investigates a database of 350 investment firms and $500bn in assets under management to find out what fees institutional investors are actually paying vs published fee rates.

Fund Management 2.0: How the institutional investment landscape has changed (CoreData, 2019)

CoreData's report highlights how the institutional investment landscape has been changing and is arguably, on the cusp of another evolutionary cycle; one in which business models will need to be reconfigured and where the relationship between fund managers and institutional asset owners fundamentally changes.

2020 Investment Management Outlook: Crossing boundaries for profitable growth (Deloitte)

Deloitte highlights how asset management firms need to cross boundaries if they are to succed. Modernizing business operations and upgrading technology infrastructure to reimagine growth, should enhance operational efficiencies, and improve client experiences.