A global study conducted on behalf of Temenos has found that investments in technology and data infrastructure sit at the top of asset managers’ priorities to deliver business growth in the recovery from the COVID-19 pandemic.
The study, entitled The Future of Investment Operations, published on behalf of Swiss fund technology company Temenos, found 56 percent of asset managers say their investment will focus on the aforementioned areas over the next 12 months.
In addition almost half (47 percent) say that ensuring ESG compliance across their product range was another top priority in the post-pandemic recovery period.
Commenting on the need for ESG compliance, the report affirms: “Questions around sustainability, diversity and social inclusion have become integral to strategic decision-making across institutional investor and asset management firms – and this focus is only likely to grow in the times ahead.”
The survey of global investment professionals across the asset management sector also reveals COVID-19 has pushed firms to review their IT strategies and transition to the public/hybrid cloud.
Some 62 per cent of respondents say cloud-native solutions will play a key role in their IT strategy, followed by the importance of software-as-a-service solutions (48 per cent) and the use of open application programme interface technology (46 per cent).
“The financial services sector has experienced a sharp acceleration in the use of cloud services over the past five years, reflecting a comparable trend across the broader economy”, says the report.
To improve levels of operational efficiency, firms are seeking seamless interconnection between functions along the investment value chain, it adds.
In the survey, 83 per cent of asset managers say they will extend their strategic alliances with asset servicing and tech partners, enabling connection of middle and back-office services straight to their front-office tools and investment book of record (IBOR).
AI and machine learning are set to play a growing role in delivering insights, both predictive and ex-post analytics, across the investment lifecycle, the report outlines.
The top applications for AI are portfolio analytics and performance measurement (60 per cent), data sourcing, cleansing and enrichment (57 per cent), and improving the operational efficiency of middle- and back-office processes (56 per cent).
However, augmenting human expertise into AI models will be a priority in applying AI models, according to 60 per cent of respondents.
This capability is essential to deliver business intelligence in a way that is explainable to product teams, customers and financial supervisors, the report highlights.
Barry Lee, business solutions director at Temenos Multifonds, comments: “For the large asset servicers, a dominant theme over the past ten years has been to centralise and standardise their services around a global operating model, delivering consistency in data, reporting and client experience. Asset managers are looking to take advantage of this greater consistency.”
He adds: “In mapping out the road to recovery, asset servicing firms and fund managers are increasingly looking to take advantage of the tools, analytics and scalability of the cloud.”
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