Technology-Led Disruptive Innovation

The World Economic Forum reported some fascinating stats around technological evolution and how it impacts our lives. Study’s show that we now spend around a third of our waking hours at work (on average more than 90,000 hours over a lifetime), more time online each day than we do asleep! These are seismic hits in the way we go about our lives, it is therefore not surprising that these technological evolutions are impacting the asset management space in a big way too.

The first thing that comes to mind for asset managers, is the advancement of disruptive technologies on both the buy-side and within the service provider landscape. Increasing numbers of fintech firms are launching on a daily basis and we are seeing see the rapid emergence of crypto funds and the likes of blockchain technologies, resulting in an increasingly competitive landscape for traditional asset managers.

In a Financial Times interview with Michelle Seitz, head of William Blair Investment Management, said, “I do believe that blockchain has the power to disrupt the plumbing of the asset management industry, and if it does, it will speed the service and the delivery of what we do for the client, and cut out costs. It could be a massive disrupter to the industry, but in a good way.”
These disruptive entrants are transforming the industry landscape and quickly winning both customers and market share.

To remain competitive, managers need to adapt quickly and respond to investor demands. A strong technology stack is no longer a competitive edge but a prerequisite, and has ultimately become intrinsically linked to a firm’s success. Increasing complexity in the information required by investors and the fact they are no longer satisfied with anything that falls short of comprehensive real time data, means that managers and service providers alike must evolve quickly.

The development of AI and Big Data means managers can enhance their client service through a highly personalised experience. Investors are now well aware of the plethora of technologies out there able to mine this infinite amount of data and demand access to the kind of information that would have seemed impossible for managers to even contemplate delivering pre 2008. It is now a common place ability of investors to digest that information, analyse it and produce meaningful results. Under this kind of pressure, it is often easier for managers to outsource to specialist providers and leverage their buying power to avoid the upfront cost of investing in technology in-house.

Cloud technology is another form of technology being enthusiastically adopted in the asset management space. With the increasing demands for data and AI comes the need for enhanced and flexible data storage and processing capabilities. Asset managers are having to invest or outsource technology solutions that can boost the responsiveness of their IT systems leading to cloud-based software-as-a-service (SaaS) being adopted, especially off-site cloud solutions for enhanced efficiency and flexibility.

Regulatory involvement has also changed and there are now extraterritorial jurisdictional compliance requirements in place as Regulators evolve compliance rules to maintain transparency within these emerging technologies. All of this is occurring while there is an increasing demand for greater flexibility and customisation.

At Apex we recognise the need to help our clients grow, scale and evolve along with us. Flexibility and service must go hand-in-hand with robust risk and control procedures. Being one step ahead of regulation, and utilising the best technology platforms to meet changing requirements of each asset class, we create a real value proposition. Only by working in conjunction with clients, and embracing new trends and technologies, do we establish a winning platform for them to grow their AUM and provide a quality product for their end investors.