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Asset servicers survey
Navigating through the storm
Welcome to the results analysis of Deloitte's Assets Servicers survey, the latest edition of the yearly survey among players of the investment management industry. It is said that successful market players need to have a clear vision of the state of the industry in order to differentiate effectively and stay ahead of the curve. This is why, as part of its Asset Servicing Center of Excellence, Deloitte aims to understand the dynamics of the asset servicing industry, measuring the latest evolutions and anticipating developments still in the pipeline. As a recognised source of market intelligence, Deloitte is thus running alternatively a survey among asset managers and among asset servicers, to understand the hurdles faced by the entire investment management value chain.
The asset servicing and asset management sectors alike face an increasingly unpredictable environment, due to mounting fee pressures, innovative product development, expanding regulations and an unstable macroeconomic background. Last but in no way least, the COVID-19 outbreak disrupted our ways of living, both privately and professionally, as never seen before. Such troubled times should push all actors to review in-depth their operations and reassess their competitive positioning.
This edition saw the participation of 10 global players located in Europe and the US with a combined €74 trillion Assets under Custody (AuC), i.e. approximately 50% of the global amount. The participants are global players from various countries of origin that provide a wide range of services to their clients, including fund administration services, transfer agency services, management services and various ancillary services, relevant to asset managers and final investors.
The results of Deloitte's survey revealed five major challenges that profoundly impacted the entire investment management value chain. First, asset servicers need to embrace innovation to improve their operational efficiency and to develop better competencies in data management, as required by their clients. Second, investors' increasing appetite for investments that fulfil Environmental, Social and Governance (ESG) criteria requires assets servicers to go beyond their existing capabilities. Third, new operating models may require a thorough reconsideration of outsourced and offshored activates. Fourth, alternative investments are following a structural upward trend; therefore, servicers need to expand and renew their service offering and areas of competence.
Finally, as if this were not enough to fill the agenda for years to come, a virus spread across all continents faster and more severely than any IT malware could ever do. Businesses in all industries, including investment management, had to improvise to face obstacles that would have felt utterly alien a year ago. On a brighter note, the industry proved resilient and proceeds with confidence toward what lies ahead.
Considerations regarding allocations to digital assets
We often equate crypto-assets with bitcoin or other cryptocurrencies. But “crypto-asset” is actually a much broader term covering security tokens and new disruptive models for the security value chain from issuance to custody and settlement