Live from Engage 2015: Investment Management in 2025

By Judy Wadness

We aren’t even through the first day of Engage 2015 and some key themes have already started to emerge. This morning, author and Singularity University founder Salim Ismail provided a thorough and compelling primer on Moore’s Law and the ways in which the exponential growth of computer-processing power is driving disruptive innovation across the business landscape. This afternoon, I moderated the panel “Investment Management in 2025,” which focused more specifically on the ways in which technology will re-shape the financial services industry over the next ten years.

The consensus among the panelists was that, by and large, both the greatest need and the greatest opportunity for companies lies in how their organizations will be able to harness and then leverage their growing volume of data.

One panelist, a chief operating officer at a global asset manager with over $300 billion of AUM, cited that the delivery of information will be critical in both servicing existing clients as well as sourcing new business.

“Maybe it’s five years from now; maybe it’s ten, but I believe there will be a time when we will be able to sit at our desks and instantaneously know the turnover rate of a particular product,” one panelist predicted. “Right now, I have to tap someone on the shoulder and ask them to produce a report… And our distribution teams, for example, will be able to access product sheets, performance information, product revenue, et cetera, all from their mobile device and pull this information up as needed.”

The panelists also anticipate that data quality will continue to be a focus area for institutions.

“It’s about figuring out how to get the right people the right information, and the consistency of this data across the different platforms is going to be critical,” added another panelist, a director of global development at a fund manager with nearly $450 billion of AUM. “We’re seeing new ways to drill down and really get at the underlying data.”

The panel, overall, focused on the five mega trends expected to impact investment managers over the next decade, including:

  • Regulatory environment (and the need for transparency, real-time data, privacy and risk)
  • Operational efficiencies (simultaneously dealing with cost pressures and growing demand for scale)
  • Demographics (amid globalization and evolving client expectations)
  • Technology (allowing for increased access to analytical data)
  • Competition (as incumbent institutions defend against new entrants)

Whether it’s responding to regulatory demands, driving new organizational efficiencies, or having the necessary infrastructure to quickly bring new products to market, the panelists cited that innovation, perhaps more than ever before, has become a fundamental part of their business strategy.

Indeed, innovation has to be a priority. One audience member even cited the famous Jack Welch quote, which seemed to capture the shared view of the panelists: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

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