Asset managers are adapting to a changing market environment by leveraging data and technology, according to a new study released by FE fundinfo.
The report underscores the profound impact of regulatory shifts, economic pressures, and technological disruptions, including the advent of artificial intelligence (AI), on the asset management sector. In response, asset managers are not only acknowledging these challenges but are actively redefining their strategies to thrive in this new landscape.
FE fundinfo’s research, which involved interviews with over 100 senior asset managers in the UK, identifies several key challenges currently shaping the industry. A significant 41% of respondents indicated that regulatory changes pose the greatest threat, closely followed by concerns over shrinking margins and increased costs, as highlighted by 39% of participants. Moreover, 37% of asset managers are wary of the disruption caused by emerging technologies such as AI.
Looking to the future, the report reveals that 47% of asset managers consider growing their assets under management as their primary challenge over the next three years. To address these multifaceted challenges, nearly half (48%) are planning substantial investments in their data management infrastructure.
The study highlights a strong consensus among asset managers on the critical role of data; 79% view data intelligence as crucial for decision-making, and 88% agree on the necessity of accurate, timely data to spur asset growth.
The spectrum of AI adoption within the sector varies, with 44% of firms still in the initial stages of exploring AI capabilities. About 32% have moved beyond exploration and are implementing AI solutions, while a smaller segment, 14%, are utilising AI extensively across multiple areas of their business. Only 6% have fully integrated AI into their core operations, illustrating a gradual but significant shift towards technology-driven asset management.
FE fundinfo CEO Liam Healy emphasised the urgency for asset managers to adapt, stating, “Asset managers are facing an incredible amount of pressure – making regulatory compliance, efficient operations, and growth tougher than ever.
“Our clients, as well as the investment management community at large, are doubling-down on strategies underpinned by a data-driven approach and supported by integrated technologies. The industry is rapidly evolving, with clear opportunities and threats at play. Embracing change and choosing the right ecosystem of partners will be a must for successful organisations moving forward.”
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