The Role of Asset Managers
Asset managers are playing an increasingly important role in global financial services; with AUM closing in on that of global banking balance sheets, they are now, in many cases, as important to our system as the banks.
With that, asset managers are facing conflicting interests: expanding competition and shrinking profit margins. It is more important than ever for asset managers to focus on deriving the most possible value from all corners of their business, not least of all technology.
- The search for returns in a difficult and complex environment that requires performance to be measured alongside risk appetite.
- Everchanging regulatory and reporting requirements for multiple regulatory bodies, and structural changes that will be increasingly burdensome to the buy side as attention is turned more so in its direction.
- A need for predictable, lower costs in order to retain and win clients—who are more informed and insightful than ever.
These factors are leading asset managers to take a closer look at their current risk management structures and the technology they rely on:
- Nimble risk management software platforms that support multiple parts of the enterprise.
- Multi-asset class coverage, flexible risk factor analyses, and choices of pricing libraries.
- Increased involvement with the investment decision-making and portfolio management process through configurable dashboards for analytics, stress testing, scenario analyses and reporting.
- Comprehensive, systematic data management.
Many of the drivers in the asset management industry have changed and continue to change—investor behaviors, market structures and products, regulation—and firms are realizing that they will need to augment their operations to be successful. Though asset management has been historically cautious when adopting new technology, the barriers finally appear to be coming down.