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.
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.
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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