Asset managers held back from digitisation

More than half (54 per cent) of global asset managers believe that legacy technology systems are holding back attempts to carry out digital transformation programmes.

A survey of 150 asset managers, fund administrators and custodians across Europe, the United States and Asia by banking software company Temenos, in partnership with Funds Europe and Funds Global, found that a significant majority (93 per cent) saw investment in operational systems as essential to improve efficiency and reduce cost.

Investment in new technology and digital transformation is the number one focus in asset management, with 38 per cent of respondents saying it will be their priority over the next 12 months. This was followed by investment in product development (19 per cent), operational efficiency (16 per cent) and distribution (12 per cent). Close to a third (29 per cent) of respondents cited data analytics as the highest priority for investment.

Despite the shift towards digital transformation, nearly a quarter of respondents (23 per cent) said asset servicers, such as fund administrators and custodians, are not currently keeping pace with the changing requirements of asset managers.

An overwhelming majority of respondents (more than 90 per cent) also said that investment in operational systems is now essential for asset managers to improve efficiencies and reduce costs.

In addition, a quarter of respondents stated that fund administrators and custodians are not currently keeping pace with the changing requirements of asset managers.

Oded Weiss, managing director of Temenos, said: “While technology has moved forward in leaps and bounds, many fund administrators and custodians have lagged behind by not deploying the right digital infrastructure to realise the optimum efficiency they require to succeed.

“As technology and the industry continues to evolve, fund administrators and custodians will face a reality of survival of the fittest, and only those who can deliver digital transformation will thrive.”

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