Just over one third of global asset managers have completed digital transformation projects, according to Fenergo, a provider of digital transformation, customer journey and client lifecycle management (CLM) solutions for financial institutions.
Fenergo’s findings from its global asset management research indicated that while most firms feel that it’s important to have a digital transformation strategy, it has been a challenge.
The research surveyed the opinions of 174 senior decision makers at asset management firms across Europe, the Middle East and Africa (EMEA), North America and Asia Pacific (APAC).
Currently, 44 percent are implementing artificial intelligence (AI) into their customer experience, and over the next two years 53 percent of asset managers expect to introduce robotics processing automation (RPA) and blockchain (47 percent), the survey found.
The survey highlighted that 84 percent of asset managers have lost investors to digital-first disruptive competitors in the previous 12 months.
Meanwhile, firms globally reported that an average 26 percent of investor applications were abandoned during onboarding due to inefficiencies in the previous year.
In addition, 72 percent of asset managers noted increased regulation, due to the rise in financial crime, as the biggest threat to their organisation.
A key driver of transformation for most asset managers surveyed (67 percent) is the need to improve operational efficiencies, especially among those surveyed (82 percent) in APAC.
The second biggest driver for change amongst firms globally is “increased competition from digital-first firms” (63 percent).
When it comes to barriers towards digital transformation, the research found that 70 percent of asset managers cited “poor planning and preparation” as the biggest barrier to implementing digital transformation in their organisations.
Asset managers also affirmed that a “lack of accountability from the executive team” (67 percent) and a “resistance to change” (56 percent) as other barriers too.
According to the research, 60 percent of firms globally have not completed their cloud readiness strategy and 58 percent of firms are prioritising investment for cloud technology within the next year.
“Our research shows that while asset management firms are committed to digital strategies, they are clearly finding implementation a challenge, largely from a lack of accountability from the top and poor planning,” said Kevin O’Neill, global head of asset management and asset servicing and EMEA head of sales, Fenergo.
O’Neill emphasised that firms recognise how important it is to provide the “optimal customer experience in an extremely competitive marketplace compounded by the pandemic and geopolitical uncertainty”.
According to O’Neill, prior to the pandemic, asset managers were already faced with challenges around operational inefficiencies, increased regulatory scrutiny and the lure of digital-first competitors to younger investors.
He noted: “The research highlights that asset managers are losing investors and revenue opportunities due to inefficiencies. In today’s trading environment where operations mostly take place remotely, the need to digitally transform and streamline investor and product onboarding is critical.”
“In this past year, it has become clear that the adoption of innovative technology will increase efficiencies, streamline regulatory compliance while enhancing the investor experience. For the firms that fall behind the future looks ominous,” concluded O’Neill.
Watch out for Issue 256 of Asset Servicing Times on 6 January where Fenergo’s O’Neill explains why the shift from manual processes to automation is now more than ever seen as critically important.
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