By Daniel Lanyon on Friday 3 November 2017
Technology is widely expected to impact every aspect of asset and wealth management but incumbents can improve, says PwC.
Asset managers must stay ahead of technological developments driving exponential change, to avoid, according to a recent report from PwC.
The UK market is facing its own set of headwinds, including uncertainty around Brexit and the upcoming implementation of MiFID II regulation. Nonetheless, PwC believes the UK will remain the largest asset and wealth management centre in Europe and will continue to flourish as a key part of this global growth across the industry.
Striking a bullish tone, the report, entitled Asset & Wealth Management Revolution: Embracing Exponential Change’, forecasts strong growth for asset & wealth management but it also warns that firms need to take action now or be left behind.
It says machine learning and AI is already changing the way in which research and investment decisions are being made and says robotic process automation will soon revolutionise the back and middle office, while blockchain could have a profound impact on the services industry.
Elizabeth Stone, UK asset and wealth manager at PwC, concluded: “There is a divide between asset and wealth managers who have acted to ensure they are fit for growth, and those who have not.”
So what can incumbents to do to realise the growth and avoid the existential threat? The industry must act in three areas, the report says.
First, asset and wealth managers should reorganise their business structure “to support their priorities and specific capabilities, and cut costs elsewhere.
Second, its says every firm “must embrace technology” whole heartedly across the value chain.
As new technologies impacts all functions of the investment management process, the level of adoption within firm “will determine if they win or lose in this fast-changing landscape”.
Lastly it says, different skills are needed, backed by new employment models and a changing customer base.
“Finding, nurturing and retaining the right talent will be absolutely vital as the industry reinvents itself to reflect it’s widening customer base,” the report said.