How pandemic lessons are re-shaping asset management firms

Northern Trust white paper includes responses from 300 asset managers surveyed across the world

How pandemic lessons are re-shaping asset management firms
Steve Randall

Global investment managers are considering lessons they have learned during the pandemic as they strive to become more efficient.

Boosting efficiency (50%) and controlling costs (47%) have been revealed as the two top priorities among 300 asset firms in a global poll conducted by WBR Insights for Northern Trust.

Enhanced quality and accuracy (45%) are also key focuses for the industry, as managers look at the best way to manage existing staff, technology, and outsourcing.

Respondents expressed a desire to take a holistic view of how their business operates including front- and back-office operations, investment decision support activities, and data management.

“As we are coming out of a two-year pandemic in which operating models were strained or challenged, there has been a renewed focus on efficiency, and how talent and technology can enable that,” said Ryan Burns, head of Global Fund Services (GFS), North America. “The most successful asset managers are leveraging new technologies and operational approaches, while also seizing the benefits of outsourcing, to enable more efficient and effective decision-making.”

Outsourcing to increase

Respondents expressed increase likelihood of outsourcing, specifically functions that may not be core to their investment process.

This has been driven by the remote work environment (60%), cost of maintaining in-house capabilities (52%) and staffing challenges (51%).

One of the key areas for outsourcing is data management, with almost half of respondents considering this in the next two years.

Approximately one-third are considering outsourcing foreign exchange, securities finance and middle office functions, and one in 10 say that supporting growth in crypto/digital assets is a priority, according to the survey.