Rising costs the biggest worry for managers
Asset managers are most concerned about managing rising costs and driving bottom line performance in volatile markets, followed by strong focus on risk and compliance issues and support for expansion into markets beyond their home country.
According to a Northern Trust survey, asset managers were struggling to balance growth strategies with escalating costs and fee pressures as 87% of respondents said their key strategic priority for the next two years would be controlling costs. However, nearly as many (86%) also planned to focus on risk, compliance and resiliency and 85% said supporting expansion into new markets was a top priority.
Another 85% of respondents either already outsourced their trading desk or are interested in doing so in the future and nearly half (45%) were considering outsourcing data management in the next two years while approximately one-third were considering outsourcing foreign exchange and middle office functions.
Also, finding a profitable growth beyond 2020 would require more than finding new streams of revenue or reducing costs, the study said.
“The most successful asset managers are rethinking their operating models from the perspective of their whole office, seeking holistic changes such as outsourcing that can help them grow their businesses,” Ryan Burns, head of global fund services (GFS), North America, said.
Additionally, the survey also revealed that 64% of respondents planned to achieve their strategic priorities by leveraging new technologies. However, investing in next generation technology such as AI, machine learning and cloud-based data management solutions would come with a cost that could be prohibitive when firms were seeking to control expenses.
“Our clients’ are proactively thinking of how to streamline their operations, and they have turned to outsourced providers like Northern Trust who can help them leverage technology to suit their business goals and objectives,” Caroline Higgins, head of GFS APAC, said.
“This is about providers who are able to give managers access to digital tools that automate workflows and facilitate self-service whilst providing the intra-day data and analytics they need for informed decision making.”
Around 300 global asset management firms participated in the survey.
AUTHOR
Oksana Patron
Recommended for you
BlackRock Australia plans to launch a Bitcoin ETF later this month, wrapping the firm’s US-listed version which is US$85 billion in size.
Financial advisers have expressed concern about the impact including private market exposure is having on their tracking error budget, according to MSCI.
State Street will restrict its membership of global climate alliance Net Zero Asset Managers after the organisation dropped its flagship 2050 goals amid ESG backlash from the US.
Betashares has launched a global shares and a global infrastructure ETF as part of the firm’s strategic expansion strategy to support financial advisers in building more diversified portfolios.
