Technology drives edge

Technology will increasingly represent an answer for asset management firms seeking higher returns, according to UK-based research house Datamonitor.

In a research paper released today, Datamonitor said the drive to offer superior performance was changing risk procedures in both the front and middle office.

According to the report’s author, financial services technology analyst Amit Shah, the global asset management industry continues to exhibit significant reform and shows no immediate sign of slowing.

He said asset management firms were finding themselves delicately balanced between expanding their product set and performance statistics to boost revenues and maintaining operational efficiency at a time of downward pressure on existing margins.

Shah said the evolution of the asset management industry was causing firms to direct their trading activities to a point on the investment spectrum where risk and reward could be effectively balanced based on investor demand.

“The most successful players in the market will be firms that choose to alter their regime to focus on satisfying client needs through utilising advanced technological solutions that integrate real-time performance and risk information into the investment decision-making process,” he said.

“These market leaders will use alpha opportunities and combine these strategies with customised client-based solutions based on return objectives, risk and time horizons,” Shah said.