2024 investment management outlook

Navigating the future requires flexibility and an eagerness to adapt, and success will likely require a firm grasp of stakeholder expectations in this dynamic ecosystem. At its core, the investment management sector is poised for a technological transformation that could see widespread impact across the entire industry. However, without up-to-date governance, firms risk wasting time and energy on systems that simply cannot keep up.

Here are some of the key findings from Deloitte’s 2024 investment management industry outlook:

• Firms will likely have to invest in technology and associated controls even amid weak performance and margin pressures, otherwise they will likely fall short of client expectations and internal efficiency goals.
• Theme-driven portfolio construction is emerging as a vector for product development even though the age-old classification of investment strategies into scales of growth versus value, large cap versus small cap, and by industry sector are not going away.
• Although investment performance is an important factor that can help drive customer satisfaction, customers’ expectations have generally grown in terms of personalization and the timeliness of interactions.
• While generative AI can transform the timelines and clarity of customer interactions, successful implementation will likely require close collaboration across the organization, including the front, back, and middle offices, finance, information technology, and risk management.
• As quantum computing technologies are increasingly being considered to help generate revenue and delight customers, firm leaders may need to play defence first, owing to the quantum-related cybersecurity threats that are currently developing.
• Navigating organizational model changes can be easier when the organization is aligned with a strong sense of purpose. Survey respondents that agree or strongly agree that their institution’s workforce gained alignment to the firm’s purpose are also more likely to report that its culture became much stronger, which often leads to greater efficiency, productivity, and collaboration.