Asset managers need to embrace new technologies, such as artificial intelligence, faster and more thoroughly to enable revenue growth, said the results of research from Accenture and the Investment Company Institute.
The study, which is based on a survey, reveals that although most asset managers (65%) have updated their cost models to be more profitable, 42% said they believe their operations and technology are not positioned to enable their firm's overall strategy.
"Managers are looking for ways to permanently bend the cost curve," said Michael Spellacy, senior managing director of capital markets, in a phone interview. "So, how can technology help make that happen?"
According to the study, 70% of money management executives said the next wave of innovation comes from AI. Other areas where technology can boost profitability for managers are within distribution and investment strategy innovation.
The study shows that 55% of asset management firms have a formal data management initiative in place to enhance data governance and quality, while 42% of survey respondents said they have a back- or middle-office system consolidation or conversion initiative underway.
Two-thirds of respondents (66%) said data management is the area of their businesses that most calls for total disruption.
"There's a tremendous desire among asset management executives to have bigger, better, faster, cheaper technology embedded in their business," Mr. Spellacy said. "There's never been a better time to embrace technology."
Mr. Spellacy further said that, despite the "gloom and doom" that often comes with discussions pertaining the asset management industry, the study shows that the asset management business is a profitable one.
Accenture and ICI in January and February surveyed 33 U.S. asset managers with nearly $15 trillion in assets under management as part of the study.
