The investment management (IM) sector is not immune to the need to embrace new technologies in the pursuit of competitive gain, fee reductions and transparency. There is an ever-increasing demand on investment managers to achieve greater returns all the while reducing cost-to-market. Whilst this exact issue is not new to the sector or any sector for that matter, how it is being solved is unique. With the emergence of blockchain technologies and an up swelling in the Fintech space, now more than ever, there is an opportunity to lead from the front and gain advantage.
The creative and strategic use of technology in this fast-paced, and massively data-dependent landscape, will set the scene for continued sector expansion into 2017 and beyond. This year has already seen the industry grow to over $2 trillion in Australia1, making it the 4th largest private pension system in the world1, and is anticipated to exceed $8 trillion by 20351. However, technology is not just providing solutions to the sector’s specific challenges. Here at AlphaCert Labs, we expect technology to actually fuel unprecedented growth in the sector too.
Competition and Change
The competitive world in which we work today is a major catalyst for the need to embrace new technologies and their associated benefits. Investment management firms require ready access to accurate data in order to produce results, and without appropriate technological enablement, there is no way to keep up.
The industry has always been fast-paced – and technology will only further this pace. Technology environments have grown organically, creating a behemoth of interlocking processes, some of which may not be compatible with each other. Our flagship product – AlphaCert – is designed to conveniently sit between existing platforms, acting as a central source of data, feeding downstream systems and processes.
Cutting Back on Human Error and Enabling Human Talent
There is an inherent element of human error in today’s investment management practices. The exceptional reliance on spreadsheets and manual effort required to bring together disparate data, introduces data and quality risks at every touchpoint. Leveraging enterprise data management technology can virtually eliminate human error, or at the very least, provide auditability capability.
Importantly, this kind of technological enablement also allows human talent to focus on core investment operations activities concerned with analysis and planning, rather than data consolidation and checking.
In Praise of the Early Adopter
Taking a chance on new technology can be incredibly valuable. Sister company ClearPoint, has seen their IM clients generate great returns for low costs. The implementation of IM technologies isn’t just about the data itself – rather, it’s about risk management and trust in the data.
Where technology can allow more rapid (and better) decision-making, it clearly identifies the company in question as having the edge over competitors who aren’t using the same products or platforms.
The Next Movements
The centralisation of data through platforms like AlphaCert provides the solution to a wide range of data challenges faced by the sector today.
Mirroring similar movements in other industries, there is movement towards more internet-based architecture. Cloud-based operations are flexible, secure, and innovative – at AlphaCert Labs, we are seeing a very real embracing of this technology as trust in security and protocols continues to develop.
As a relatively young industry, investment management can be significantly shaped by changing technologies – and looking forward, we’ll see those on the forefront of technology overtake those who stay stuck in the past. Get in touch if your organisation today is facing an ever-increasing data dilemma.
1 FSC UBS State of the Industry Report 2016