Data and technology in investment management
How CEOs can deliver a competitive advantage
Disruptive data and technology trends in investment management are challenging the industry’s leaders. CEOs who are short on internal expertise are facing ballooning costs and a myriad of new applications. As investment management technology moves to the core of the business, CEOs must set a clear vision for how they will drive competitive advantage.
The rise of data and technology in investment management
Data and technology are transforming the asset management industry, defining future industry leaders. Several factors are increasing the reliance on data and technology in investment management:
Clients and employees expect instantaneous and accessible information. From market data delivered to investment professionals to interactive client reporting, firms must be able to deliver high-speed, accurate data regardless of internal silos, global operating models, or other internal constraints.
Off-the-shelf products and information no longer suffice. Buyers and employees expect customizable, self-service capabilities on demand. Managers must develop the agility to customize products and services without amplifying operational cost and complexity.
With new challenges come new providers. Fintech firms, outsourcing platforms, consultants, and data providers are joining an ever-increasing ecosystem of service providers supporting the industry.
Asset managers are expanding their efforts to mine an exploding amount of data, driven by client interactions, new alternative data sets (e.g., from cell phones or internet-enabled appliances) and multiplying levels of market information.
Risk and compliance
Increased customization, from fee schedules to IMAs, and increased regulatory reporting amplify organizational complexity. Technology is becoming essential to manage risk and compliance obligations in efforts to reduce risk and minimize manual intervention.
The COVID-19 pandemic has also accelerated the speed of change in the industry and created new pressure points on technology. Data and technology will be critical resources for leadership teams to leverage as they navigate the restrictions of the COVID-19 operating environment and build a plan for a post–COVID-19 world.