The 2021 edition conducted in partnership with Aite Novarica identified some key trends:
– Sixty seven percent of respondents have prioritized the integration of ESG factors into their investment strategy.
– 35% of firms reported being most concerned about how cybersecurity will impact their business.
– More than 62% of respondents agree AI and ML use cases have grown.
Linedata, a global provider of asset management and credit technology data and services, unveiled its tenth Global Asset Management Survey Report in partnership with leading financial services insights and advisory firm, Aite Novarica. The survey highlights the current state of the industry, operational and technology trends that are shaping day-to-day practices and how the industry will continue to evolve.
“Over the last two years, asset managers have had to reprioritize their business operations and make a dramatic shift that focused more on innovative options, risk management solutions and creating a greater sense of transparency with employees and clients”
Since the last survey was conducted, in 2019, much has changed from a global, regional and industry perspective. As the world navigates the changing nature of modern day investing and ever-evolving customer needs, there are a few factors that are clearly shaping asset management – ESG, cybersecurity, transparency, artificial intelligence and machine learning.
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“Over the last two years, asset managers have had to reprioritize their business operations and make a dramatic shift that focused more on innovative options, risk management solutions and creating a greater sense of transparency with employees and clients,” said Linedata’s Global Head of Asset Management, Gary Brackenridge. “As we look to continue successfully navigate the changes to come, we must focus on integrating solutions into portfolios that align with organizational and customer values.”
Key findings from Linedata’s 2021 Global Asset Management Survey include:
- More global managers look to offer ESG integrations, but challenges remain – While 67% of respondents have prioritized the integration of ESG factors into their investment framework, 30% believe the integration into portfolios is a lower priority.
- Overall, survey respondents have incorporated ESG integrations by creating a centralized ESG team (46%), receiving a score from an ESG rating company (43%) and becoming affiliated with sustainable investing organizations globally and regionally (42%).
- Additionally, respondents cited ESG integrations are a lower priority for the following reasons: lack of client demand (33%), lack of industry standards (31%) and two respective groups believe there is deficient training and support, and the “death of” ESG data and scoring (each totalling 29%).
- Mitigating cybersecurity risk rounds out top challenges in investment management – With threats on the rise, 35% of firms reported being most concerned about how cybersecurity will impact their business, a change from 2019 where that was not a top 3 concern.
- In addition to heightened focus on cybersecurity, managing risk ranked as the second biggest concern (29%), followed by vendor oversight (26%). All of which, can be closely tied together.
- In 2019, investment performance (34%), attracting new clients (34%) and operational efficiency (33%) were noted at the top three challenges in investment management.
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- Artificial Intelligence and Machine Learning see growth in deployment for operations and compliance use cases – More than 62% of respondents agree AI and ML use cases have grown year-over-year.
- Of those surveyed, the population with the highest adoption rate are focused on regulatory know your customer (KYC)/anti-money laundering (AML) requirements (70%) and portfolio and risk analytics (69%).
- Transparency is quickly becoming a critical part of a firm’s identity – The path to differentiation is beginning to diversify, 20% cited risk management as a key differentiator, followed by investment performance (19%), transparency (16%), innovation (12%) and cost structure (10%).
For the asset management industry, resiliency and adaptability to the shifting landscape is crucial for success. The COVID-19 pandemic has shifted demand, making the future of the industry refocus and emphasize its attention on technology that will drive forward customer and client satisfaction, as well as operational simplicity across the board. The asset management industry will continue to see a surge in environmentally focused investments and products with the emphasis on simplifying and digitizing antiquated processes.
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