While asset management continues to rank among the world’s most profitable businesses, tepid markets and turbulence that persists in 2016 “highlights the continuing dependence of many managers on rising financial markets to boost asset values rather than on long-term competitive advantage to generate net new flows.” This according to BCG in an article relating to its 2016 Global Asset Management report.
Asset managers need to take a realistic view of their business and what’s required to prevail when market growth isn’t a given. Those that do will see that “competence in advanced data and analytics will define competitive advantage in the industry in the not-too-distant future,” says the report.
For most firms, the alternative is to “risk becoming irrelevant and trailing others in the ability to generate superior investment returns.”
Doubling Down on Data
Asset managers who build competence in the advanced data and analytics enabled by new digital technologies “have the potential to gain a significant information arbitrage advantage over their peers. They will be positioned to understand, monitor, and fend off the growing array of risks that confront managers, their clients, and the global financial system”
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