BY Matt Atkins
The asset management industry will be radically altered in the next 15 years, says KPMG.
A new report, Investing in the Future, makes a number predictions including that, by 2030, client bases will be fundamentally different as Generation X approaches retirement; the number of players in the global market will halve in the next five years; and big tech firms will make headway into the sector. The report also stresses that asset managers are currently behind the curve on embracing new technology.
Current business models will prove woefully insufficient, according to Tom Brown, global head of investment at KPMG international. "We are on the verge of the biggest shake-up the industry has experienced; and the message to asset managers is clear – adapt to change or your business won't survive. The two biggest issues that need to be addressed are the changing client base and technology, and asset managers need to get to work on these areas now."
Technological investment will be critically import in the coming years says the report. The future needs of clients will be fundamentally different from today, with a growing demand for personalised information, education and advice. However, businesses are currently focusing on the wrong areas.
"Asset managers still have a long way to go to recognise and exploit big data and data analytics," says Ian Smith, financial services strategy partner with KPMG in the UK. "While IT is already attracting a significant amount of investment, it is not being channelled into the right areas. Many businesses are putting their efforts into trying to unpick the complex legacy of disparate systems and technologies while trying to make sure they provide the right level of control to meet increasingly stringent compliance. There is too little focus on building the architecture to meet the business needs of tomorrow."
The report also predicts a shift in the way customers buy investment products. Online purchases are expected to increase, while 'Trip Advisor type' websites will provide buyers with greater opportunities to conduct their own research.
Report: Investing in the Future