Client experience is becoming a more important competitive battleground in asset management, particularly for wealth managers who face pressure to meet the needs of younger, digital native investors. Nearly 40% of asset managers in the survey said that the client experience was a key point of differentiation versus their competitors, up from just 7% a year earlier, according to a study released this week.
Asset managers are facing challenges to their growth and profitability, particularly after a difficult year in 2022 that saw falling markets, net outflows, and squeezed margins. They are focusing on two priorities: operational efficiency and cost-cutting initiatives, and improving the client experience, said the Linedata Global Asset Management Survey 2023 .
Improving client experience “is especially prevalent among wealth managers in our survey (46%), where there is an acute pressure to meet the needs of younger, digital native investors who expect information and guidance to be available on demand, and increasingly want to see data that goes beyond performance – such as understanding the ESG impact of their investments,” said the study.
Linedata’s report is an annual study that examines how the asset management industry is adapting its technology and operations to support growth and performance. The survey was conducted in Q1 2023 and involved 265 senior decision-makers from buy-side institutions across North America, Europe, and Asia.
Automation seen as crucial
Automation is seen as a crucial part of the drive for operational efficiency, with nearly three-fifths of asset managers (57%) saying that increasing automation to improve efficiency is a top strategic priority for the next 12 months. Cost-cutting initiatives are also a high priority, with 55% of asset managers prioritising these measures.
The report highlights the growing importance of generative AI in the asset management industry. Tools such as ChatGPT and Dall-E offer potential for productivity gains, but asset managers face a balancing act in keeping pace with the technology while also deploying it responsibly.
Finally, the report provides a detailed breakdown of the survey results by region and type of asset manager, discussing the specific challenges and priorities of each group. It also explores other topics such as ESG investing, data analytics, and regulatory compliance.