Investment in technology and data infrastructure is the top priority for asset managers during the recovery period of the Covid-19 pandemic, according to the latest findings from Funds Europe.
Its report, The Future of Investment Operations, which was written for banking software company Tenemos, reveals that 56 percent of asset management say will focus on technology and data over the next 12 months, while almost half (47 percent) will focus on ensuring ESG compliance across their product range
The survey of global investment professionals across the asset management sector also reveals Covid-19 has pushed firms to review their IT strategies and transition to the public/hybrid cloud.
Approximately 62 percent of respondents believe cloud-native solutions will play a key role in their IT strategy, followed by the importance of Software-as-a-Service (SaaS) solutions (48 percent) and the use of open API (application program interface) technology (46 percent).
To improve levels of operational efficiency, firms are seeking seamless interconnection between functions along the investment value chain. According to the survey, 83 percent of asset managers expect to extend their strategic alliances with asset servicing and tech partners, enabling connection of middle-and back-office services straight to their front office tools and investment book of record (IBOR).
AI and Machine Learning are set to play a growing role in delivering insights, both predictive and ex-post analytics, across the investment lifecycle. The top applications for AI are portfolio analytics and performance measurement (60 percent), data sourcing, cleansing and enrichment (57 percent), and improving the operational efficiency of middle- and back-office processes (56 percent).
However, augmenting human expertise into AI models will be a priority in applying AI models, according to 60 percent of respondents. This capability is essential to deliver business intelligence in a way that is explainable to product teams, customers and financial supervisors.
Barry Lee, business solutions director, Temenos Multifonds, said: “In mapping out the road to recovery, asset servicing firms and fund managers are increasingly looking to take advantage of the tools, analytics and scalability of the cloud.”