Fintech Insights

Separating the Best from the Rest in Asset Management

Wayne Riches, director of Strategy and Solutions Management at FIS

July 23, 2018

The asset management industry is seeing a significant shift in focus, as asset managers have reduced their focus on operating margins in favor of growth initiatives.

Our 2018 FIS Readiness Report found that 57% of asset managers say that acquiring new clients is among their top three growth objectives for the next 12 months; while the percentage of those who are focused on improving operating margins has dropped from 49% in 2017 to 33% in 2018.

With an intensified focus on growth and client satisfaction, the asset management industry is embracing technology with greater openness than in the past. Asset managers and administrators are recognizing the benefits of technology, not only for cutting costs, but also for freeing up resources and giving them greater sophistication in data analytics to support client communication and the investment process.

And those with the most advanced operating models already have a competitive edge. Asset managers and administrators that are performing best across the six operational pillars we assess – the Readiness Leaders – are growing their revenue 1.5x more quickly than the rest of the industry. And of the six pillars, data management and digital innovation have had the greatest impact on asset managers’ growth performance. Firms that can build on their capabilities in these areas are best positioned to accelerate their growth.

Asset managers and fund administrators need to have a strong data management strategy, with access to real-time to data, so they can capitalize quickly on market movements. Capitalizing on data management and digital innovation helps provide clients with a positive experience of speed, quality and ease with which they can consume their information.

But there’s another advantage of a strong data management approach; one that extends beyond client value. Having a sound underlying data management strategy provides the needed foundation to expand and exploit emerging technology, such as robotics process automation (RPA) and machine learning, which are critical enablers of growth and can help boost firms’ performance.

Our industry is increasingly seeing companies use RPA and machine learning to develop bots with rapidly advancing capabilities for understanding, learning, communicating, and problem-solving. In fact, according to the FIS Readiness Report, 13% of the most automated firms are live with RPA or machine learning solutions, versus 2% of the least automated firms.

As these technologies continue to unleash new waves of digital disruption in the financial services industry agile firms that can adapt quickly will experience the most growth. Early adapters are already seeing business-value through a strong data management approach – and combined with strong digital capabilities, they have a competitive advantage among competitors.

Tags: Digital Innovation, Investments, Technology