Asset managers are tying their future to new technologies
Even more than regulations, technology should determine their transformation and accelerate it, according to a major SGSS survey.
To better grasp the expectations of its asset manager and investor clients, SGSS has undertaken a major survey among players that are representative of the sector in Europe. Around a hundred investment managers were questioned about their long-term vision of asset management, via interviews lasting between one and two hours.
“Asset management bosses expect, for 84% of them, that technology will have the greatest influence on their future model, ahead of regulations (82%)”, says Etienne Deniau, Head of Strategic Marketing at Societe Generale Securities Services (SGSS). “Not without some trepidation, because the impacts of their activity are not yet clear, the implementation of RPA (Robotic Process Automation), for example, which has already been the subject of projects, is still in its infancy”.
For 40% of asset managers and investors surveyed, the number one challenge relates to the use of data, followed by the prospects resulting from robo-advisors (32%). Indeed, one of asset managers’ ambitions is to take back control of distribution, with 20% of respondents either looking to launch a direct distribution strategy or having already done so. Meanwhile, people are still rather unclear about the use of Blockchain technology, essentially in record keeping and KYC (know your customer).
Given the vast amount of work that needs to be undertaken, asset managers are proving to be open to cooperation, whether it be alliances with fintechs, consolidation or the outsourcing of operational duties (64% of those questioned said they were worried) with traditional partners such as asset servicers.
The innovation resides in the extent of this outsourcing that henceforth includes middle-office duties, and not just back-office and custody duties as was the case thus far. Asset managers are interested in pre-trade, brokerage, trading and confirmation services.
Head of Marketing at SGSS
The phenomenon primarily characterises small and mid-size players, bearing in mind that the size of asset management companies is becoming increasingly decisive for their strategy: the critical mass has gone up to 2 billion euros, or even 5 billion, and size determines the diversification ability, a fundamental objective for 42% of respondents.