A recent Northern Trust survey examined how asset managers have shifted strategic priorities. A recurring theme throughout the survey was the heightened significance of data and analytics. The vast majority of respondents (83%) who are considering outsourcing will do so to augment their data management capabilities. Furthermore, 59% are looking to outsource securities finance and 29% collateral management.
While some managers may have de-emphasized cost control recently, those who are focused on reducing costs look to outsourcers to augment their expertise across capabilities such as securities finance, liquidity management, and trading, according to the report.
“The focus on securities finance and liquidity is likely a response to the interest rate environment, and Northern Trust has developed products like our FICC repo offering to give asset managers alternatives that may help them navigate that path,” the report stated.
Another area of focus was identified in terms of performance and higher levels of alpha or returns. As such clients look for products and services such as securities finance or capital market products that can increase those returns on their assets and ensure optimization of their liquidity. In Asia, Northern Trust’s team is also seeing that focus. Although Asia has been slower to outsource than other regions, the drive for alpha is aligned to other regions and is a key consideration.