BNY Mellon released survey results of asset manager thinking on digital capabilities. The need for better investment outcomes has driven the industry towards digitization for some time, but COVID-19 accelerated the trend. Business continuity and resiliency rapidly became urgent and critical, going from a sensible planning exercise to a means of keeping businesses running day-to-day. Data management fits into a picture of broad digital imperatives that the asset management industry must address.
Survey respondents identified several foundational technologies and organizational obstacles they see on the path to improved investment outcomes and the operational transformation needed to deliver them. They also highlighted the importance of service providers sharing this path with them. They recognize the need for robust services that help them navigate complex changes to their firm’s strategy, investment management approach and operations.
Cloud computing dominates today’s digital imperatives, and holds a dominant position among asset managers’ planning for the next three years. Almost all (96%) respondents said they are currently using it to drive digital and operational transformation. They also rank it as the single most important technology at present. Cloud is delivering advantages in business agility, allowing asset managers to work more seamlessly internally as well as with service providers and other third parties.
Looking ahead, 84% of asset managers are planning to develop blockchain and distributed ledger technology to synchronize data and processes. The uptake of blockchain technology goes hand in hand with plans to leverage asset tokenization, with 72% of respondents planning to develop digital assets over the next three years.
Together, these technologies could open up product development opportunities and broaden investment options for new pools of investors. It could also offer liquidity to investors in traditionally illiquid investments, such as alternatives.
Technologies that bring additional enhancement to clients’ experiences and their investment returns also rank high on the list of digital imperatives for asset managers within the next three years. These efficiency technologies include machine learning and artificial intelligence (78%), predictive analytics (75%) and robotic process automation (75%). Effective deployment of these advanced tools will be essential for asset managers to remain competitive in an increasingly complex market.