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For investment banks, asset managers, and wealth managers, technology plays a leading role in enabling business strategy––and is helping them prepare for what lies ahead. In fact, many capital markets firms are already investing in new tools and platforms. A full 93 percent of technology executives at firms we surveyed already have long-term plans for technological innovation throughout the business.
But change management can be an issue for some, with lack of buy-in from employees and some senior executives. In this series, I will discuss how asset managers, wealth managers, and investment banks expect technology’s influence to grow over the next three years––and how to best navigate the transition.
Recently, Stewart Carmichael, CTO of Schroders Investment Management Ltd., was discussing the growth of technology and digital innovation in capital market firms when he said this: “The industry is changing so quickly that if you can’t move fast, you’ll be left behind.”
It’s an ominous prediction that warrants attention. Emerging, and rapidly maturing technologies are expected to power innovation in the years ahead. Technologies such as Artificial Intelligence (AI), Blockchain, Quantum Computing, and Next Generation Cloud or Clouds, will all have a major impact on operations.
In some areas, capital markets firms are preparing for this digital future, and many have already made significant investments in APIs, data and analytics, automation and cloud computing to increase efficiency. Many of these firms expect digital transformation to improve their bottom line:
- 40 percent believe it will improve customer loyalty, reduce operational costs and create new revenue streams.
- 50 percent of asset managers believe digital technology is already having a significant impact on investment planning; and
- 90 percent of wealth managers believe digital technology will have a significant impact on their business in the next three years.
Despite the appetite for transformation, many barriers still exist and for firms that don’t address these challenges, the road ahead will be difficult. Lack of collaboration with IT, incompatible systems, and compliance challenges can be all road blocks to adoption.
In order to avoid these challenges, firms need to adopt strategies that have the support of senior executives and employees. In my next blog post, I’ll explore how capital markets firms can better navigate the future of digital technology by removing the stumbling blocks for embracing innovation.