Earlier this month, the Investment Association held their virtual ‘EmTech: The Future of Investment Management’ conference. The final session of the conference took the form of a panel discussion focused on innovation and transformation within the investment management sector, looking at the current status of innovation in the industry and future areas of development. In this blog post, we outline some of the trends identified and opportunities for asset managers to innovate their offerings through technological adoption.
Self-admittedly slow to change at times as a sector, the onset of the pandemic forced the investment management sector to rethink how they reach and interact with their customers. Facilitated in part through the move to seemingly ‘simple’ solutions such as permitting digital signatures, the move to digital in many cases has not just been a necessity, but a success, as 2020 saw strong financial performances and record trading days. As a result, it would appear that the integration of technology within investment management is here to stay.
Across the board, it was noted that technology’s role in the investment space is largely to assist firms in achieving efficiencies and scale, rather than replacing them. Leveraging new technologies such as AI and machine learning could have a dramatic impact on key focus areas such as ESG metrics and data analytics. But uptake varies across the industry. Embracing new methods and technologies can be a slow process with legal, financial and cultural barriers often preventing quick adoption.
However, despite the mixed appetites, there are still plenty of opportunities and a range of approaches when it comes to digital transformation. Where focus lies on making operational efficiencies, it is likely that incumbents will look to partner with B2B service providers, including fintechs, to deliver more cost effective solutions. Where innovation touches on client interaction and customer experience, there may be more of a willingness to develop propositions in-house to retain the core identity and USP of the firm’s offering. In both instances, we are likely to see a continued shift in the investment management sector in its embracing of technology, mirroring the drive towards digital transformation currently being experienced across other financial services market segments.