SINGAPORE (Dec 12): A recent survey of over 500 global asset managers shows that more than two thirds, or 68%, of global institutional investors are concerned about their ability to hit their growth objectives within the current market environment.
Published by State Street Corporation, the study entitled New Routes to Growth found a majority 72% of asset owners expect to adopt a more defensive investment strategy going forward, with the same proportion of asset managers intending to slow their plans for expansion over the next five years.
Among the respondents’ strategies to adapt to current market environment, emerging technology (48%) has proven one of the top enabler of growth over the next five years – a marked difference from State Street’s 2017 study findings, where just 18% of respondents at the time expressed the same sentiment.
However, a significant 61% of respondents for the latest survey indicated they would take an incremental approach to embracing emerging technologies versus re-engineering their entire IT ecosystems, which State Street considers is due to a note of caution.
In this respect, the financial services provider also notes that many investment firms are now selectively seeking tech partners as a way to gain scale while adopting emerging technologies, given the cost involved with an architectural overhaul.
The process of integrating new technologies into existing infrastructure is also reported in Asisa Pacific to be the biggest challenge (50%) around implementation. As such, an increase in acquisitions and partnerships could also have the potential to reshape the industry.
Liz Nolan, State Street’s CEO for EMEA, says the latest survey findings further demonstrate a situation of “unprecedented change” for today’s investment industry.
“Our clients face increasing complexity and regulatory expectations, as well as the need to upgrade technology and improve their data management; all the while carefully managing costs,” says Nolan.
