Last week I talked about how, by integrating digital technology, asset managers can create products and support that investors want. This week, I’m continuing along the investment management lifecycle by looking at how asset managers can grow client relationships and service them efficiently.

Analyze this

Actively managed funds can benefit from more analytics and insights for investment decisions. Take social media and big data analytics, which can uncover market sentiment that may affect investment decisions, prices and trade volumes. Predictive analytics supporting “what-if” analysis can forecast impact or fund performance by new combinations of strategies or fund managers. Operationally, variance price analysis can provide new insights into improvements in trade execution that could result in better returns.

On the other hand, passively managed funds may have less need for analytics for portfolio management. For these firms, collaboration and mobile technologies can help asset managers stay in close contact with advisors and/or investors.

Automation—the ticket to creating operational efficiencies

To optimize the potential of digital technologies, asset management firms should concentrate on end-to-end solutions that streamline and automate as many processes as possible. As firms address multiple demands, including new regulatory requirements, new products and asset classes, they must struggle to find solutions that integrate processes from the front office to the back office. What’s more, firms must also keep costs in line with flattened fees.

Innovative asset management firms are using cloud and software as a service (SaaS) solutions, big data, analytics, mobile and social applications to gain the competitive advantage.

Digital’s proposition is too big to ignore

Many asset management firms have been hesitant to use social media because of compliance and regulatory concerns. But, in today’s fast-paced, ever-changing world, an interactive brand experience can build positive associations for brands and really is not an option anymore. Asset managers may need to define solutions working with regulators that overcome the constraints of content reviews and other regulatory requirements that restrict the use of collaboration and social media.

Read the report.
Read the report.

Successful digital transformations combine a well-thought-out operating model with a flexible IT and data infrastructure, providing the foundation for effective use of technology at every phase of the investment lifecycle. In fact, we recently surveyed Generation D—or digital generation—investors in Europe and found significant opportunities digital brings to the investor-advisor relationship. Consider this, some 27 percent of respondents we surveyed indicated they have switched financial institutions to obtain a digital tool, service, channel or application that their current institution did not offer.

Bottom line: digital service is an important component in the emerging value proposition—it is not just the future of investing, but the present.

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2 responses:

  1. I completely agree that digital is too big for asset managers to ignore and their clients will expect it. The financial industry overall will need to leverage digital to attract new clients, while implementing digital automation to boost operational efficiencies and per-employee profit. The industry knows this, just look at the 12,000+ US startups focused on banking businesses. No doubt many are leveraging digital in a big way.

    1. Alex – Thanks for your post and your feedback.

      I agree that advancing the use of digital technology and analytics is increasingly expected. For asset management firms, this applies to the client and the distribution channels. And with the increased attention on fiduciary standards, especially in the past week, asset management firms should be thinking about the impacts to advisors and how they can better use digital to support them in the service they provide to clients and better anticipate real needs.

      Operationally, digital can certainly drive efficiencies. But with analytics, collaboration and transparency, overall service quality to clients is bound to improve, too. This may be more relevant on the wealth management side of the business, but still a consideration for investment managers.

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