Asset management industry has enjoyed a golden period since the global recession in 2008. However, as is the case with any economic cycle, the growth has ground to a halt. The downturn in the economicoutlook along with increasing interest rates has resulted in a halt in the increase of global assets under management, a rare occurrence since the 2008 recession. The direct result of this is a decline in profitability and pressure on margins for asset management firms globally.
The smarter firms have anticipated and taken cognisance of the changing landscape and have looked for ways to reinvent themselves to the new reality. Currently, their emphasis is on generating higher alpha and reducing costs in areas of sales and distribution. This is possible when AMCs leverage advanced analytics and transform themselves into a digitally savvy firm from front to back.
The asset management space is no stranger to technology. Historically, a majority of the technology adoption was focused on automation of operational tasks such as sharing of prices and information, execution and clearing of trades, rather than areas such as fund management, which were always considered as tasks that required a “human element”. However, with rapid digitalisation across all industries, advanced analytics is starting to find applications in the previously human-centric roles. This
blurring of lines is set to disrupt the asset management space drastically in the near-future.
Through this white paper, lBS lntelligence and Hexaware endeavors to explore the potential impact and application of advanced analytics w.r.t. buy-side asset management firms. It looks at ways advanced analytics is being leveraged and the possible future use cases that allow the asset management firms to leverage advanced analytics to their significant advantage.
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