2019 Investment Management Outlook
Another year of challenges with new opportunities for success
Investment management appears to be changing radically, driven by shifting investor preferences, margin compression, regulatory developments, and advancing technologies. While the nine-year bull run has diminished the intensity of these industry challenges, experience tells us that markets work in cycles. Given this complex and challenging industry environment, investment management business leaders should consider how to grow their business, how to run operations more efficiently, and how to deliver the next level of customer experience.
Topic one: Picking the right growth options
Investment managers are pursuing a variety of organic and inorganic strategies to achieve their overall objectives.
Topic two: Improving the efficiency of the middle and back offices
- Internal factors – Cloud and advanced analytics: In an Ovum survey, US firms prioritized advanced analytics deployment in the front office, especially in the portfolio management and marketing functions; whereas middle-office priorities for deploying advanced analytics seem to diverge globally.
- External factors – Laws and regulations: Sweeping changes over the past year have impacted reporting requirements, deal structure, and taxation. On the other hand, the recent SEC ETF proposal standardizes regulation to ease the operational barriers for firms. Given the diversity of regulatory impact, firms need to strike the right balance while allocating resources between operational and compliance activities.
Topic three: Delivering the next level of customer experience
- Digital voice assistants are expected to drive differentiation: Digital voice assistant integration is entering the investment management space, and some firms are expected to use it to delight existing customers and attract new segments.
- Redesign customer platforms: Many investment management could strive to offer newly designed customer portals, most likely by acquisition or partnership with tech-savvy firms.