Top 5 ways technology is changing asset management

Tuesday 16 October 2018

Tech_invest

Author: Jeff Levi

 

1. Data will drive more personalisation of investment advice

Historically, investment advice has been driven by perceived investment needs, typically mass produced or highly customised. Data will enable a much greater degree of real-time personalisation around specific goals and desired outcomes, with investment advice built to meet specific financial needs.

2. Digital will simplify and improve the client experience and create a more holistic experience

Historically, the client experience approach has been in-person face to face interaction, heavily anchored to personalities, and to a lesser degree to content and reports. Looking ahead, technology will create omni-channel interactions, redefining engagement – you can engage somebody in multiple ways simultaneously. Digital simplifies the sharing of information, brainstorming, identifying preferences and needs, and can creates a very tailored and elegant experience.  It will allow for a more holistic review of one’s financial well-being, considering traditional areas like portfolio management, estate planning and taxes to newer areas such as debt management and healthcare.

3. Big data will create new alpha sources

Today most investors rely on pretty similar sets of information, and alpha comes from having an edge on decision-making off that information, whether it is timing advantages, better insight or a different perspective. Looking forward, there will be pretty significant growth from investors who can drive alpha, by using unique data sources and running analytics on big data.

4. Robotics, blockchain and other new technology will streamline processes and eliminate historical intermediaries

The ability to automate tasks that have historically required a lot of monotonous human labour, and the ability to connect parties seamlessly without having middle men to connect the dots, the ability to share information at the press of a button and store things in the Cloud safely, all of this will over time allow managers to operate at much lower costs, and at much greater efficiency. 

5. Technology will enable new business models

Firms that have not been major players in the investment advice business will begin to enter the space, because they are able to leverage technology. Perhaps they will have unique access to distribution, or to data, or a unique know-how they are able to package and deliver differently. To some degree, we will see the democratisation of investment advice. We may also see that the absence of new technology from existing firms will deliver a ‘Kodak’ moment, where some firms will decay away.

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