The Growing Importance of Asset Management

The Growing Importance of Asset Management

Capital Markets CIO Outlook | Monday, June 25, 2018

Considering the role of asset management in reshaping the future of businesses, asset managers are tenaciously engaged to unfold new dimensions in terms of their offerings. Already having predicted a paradigm shift in the investor base, asset managers are amending the configurations of asset management systems to make sure that these systems are poised to deliver favorable results..

The assets under evolving economies in 2020 are expected to grow at an annual compound rate of 6 percent. Driven by government-incentivized plans, individual retirement plans, and growing sovereign wealth funds, these assets will have increased costs. A demand for transparency and comparability along with the requisite to comply with regulations will also have a notable impact on the costs of these assets. In a situation where costs will be sky-rocketing, changing demographics and markets will thrust asset management to limelight. Further, related companies will seek for a transparent business models that would align with the interests of customers and at the same time apply to all major markets including Asia, Latin America, and Europe.

By 2020, regulatory reporting is supposed to lay a strong impact on every aspect of businesses. Soon, regulators will have real-time access to portfolios, and cross-referenced market data. In such a scenario, asset managers will be in the driving seat, raising capital by supporting growing urbanization and cross-border trade. With passive products encompassing 35 percent of assets in industries, investors will increase their investment allocation to passive products and lower the search fees for those products. These new fund platforms will emphasize on costs like never before, thereby making scaled economies paramount. In a world where assets will become pivotal, modern technologies will become mission critical to drive customer engagement, data mining, operational efficiency, and tax reporting.

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