Here are five technologies at the vanguard of that change.
1. Artificial intelligence (AI)
Investment Management has already seen the early impact of AI with the advent of robo-advice. Many institutions are now starting to consider how they can deploy AI technologies in the same game changing way that the motor industry has launched driverless cars that can arguably operate more safely than humans.
We are entering the third era of computing technology, where machine-learning is meeting big data. This provides advancements that have so far been beyond the reach of most investment management firms. The applications of AI in Asset Management can and will impact the entire value chain. Starting with the optimisation of sales and marketing interactions, predictive market modelling and portfolio management based on instant processing of petabytes of data, to the use of AI bots for transaction processing across the entire middle and back office.
Only time will tell what, if anything, are the limits for AI.
2. Remote working technologies
The pandemic has accelerated the drive towards technological change, but also caused a huge re-think in approaches to digital transformation.
Research from Deloitte suggests that 92% of investment management firms are implementing or, are planning to implement technologies that enable their people to work from anywhere. Social distancing and remote working environments increase the need for seamless two-way communication across multiple digital channels.
Digital interaction will continue to be essential to driving customer trust, loyalty and market share even when the pandemic wanes. This is supported by the biggest expected net increases in technology spending in 2021 being on cybersecurity and data privacy. 68% of those surveyed said that Cybersecurity and the customer experience are top priorities now, and in the days ahead.
In the Broadridge Next-Gen Technology survey, over 500 C-Suite executives and their direct reports were asked how their firms were using emerging technology. According to the survey, many firms are already well into their digital transformation, with 53% of APAC firms, 45% of EMEA firms and 49% of North America firms surveyed in the advanced stages of implementation. It is worth noting that those already in this advanced stage are most likely to be accelerating transformation during the pandemic, potentially widening the gap on their competitors.
3. Cloud technology
The pandemic has also shone a light on the benefits of cloud migration in asset management and elsewhere. Firms that were already taking steps towards cloud migration were in a far stronger position when workforces became home-based.
We see four clear benefits to using cloud technology:
- Rapid scalability - the ability to expand and contract capacity adds tremendous flexibility.
- Effective cost management – moving from a large, fixed cost to a flexible and variable cost model.
- Leveraging provider information security (infosec) investment – having access to the security resources already invested in by the provider, for whom this is the main part of their business.
- Cost transparency – pooled data utilities can also break down internal data silos.
While the shift toward cloud-based computing has been steadily taking place for years, there is still more to do, and firms will continue to consider what legacy technology they can move to the cloud.
While there is an appreciation of its wider role as a technology, the specifics of how it would facilitate asset management firms is now coming to the fore.
In brief, Blockchain is a distributed ledger - a database of shared records between two or more parties. Details are verified, locked-in, and synchronized. It is designed in a way in which all parties on the blockchain benefit from better security, increased transparency and efficiency in business processes.
Blockchain can, among other things, significantly reduce the frictional costs of asset managers, leading to the potential for reduced charges for investors. It also provides the opportunity for fund managers to improve data and identity security and streamline regulatory compliance and reporting functions.
5. APIs (Application Programming Interfaces)
APIs – the software interfaces that allow two applications to talk to each other – are already widespread in banking. And they’re now being developed by asset managers to connect with both FinTechs and traditional industry service providers such as Custodians and Administrators.
APIs helped drive the FinTech revolution for good reason – they make it cheaper and faster to integrate and deploy solutions. Asset managers don’t need to build significant in-house infrastructure to have access to expansive sets of industry-leading data and APIs make it easy to select the best source of data or content and not rely on a particular third-party provider to aggregate it.
For companies who know how to implement APIs, they can cut costs, improve efficiency, and help the bottom line.
How we can help
Broadridge simplifies the complex with The ABCDs of Innovation®. It’s how we help our clients understand and apply next-gen technologies — including AI, blockchain, the cloud and digital — to transform their businesses and get ready for what’s next.
At Broadridge Fund Communication Solutions our technology meets the highest standards. We are constantly monitoring and evolving to ensure that we are uniquely positioned to support our clients with any end-to-end data, regulatory or digital challenges.
If you would like further information about any of our solutions and services, or you have any questions, please contact us on +44 207 4181 4556 or at FCS_Sales@broadridge.com.
Together, we are always ready for what’s next.