Asset management in the cloud
December 15, 2021
December 15, 2021
We are living in volatile times and in this uncertain environment, the cloud is seen by many asset managers as a key component of their continuing growth strategy. Our recent research, the Future of Asset Management, suggests that most asset managers are still in the early stages of migrating to the cloud, with just 8% indicating they have completed their journey to the cloud. Operating in the cloud could provide the certainty that many firms are looking for, helping them to adapt their operations to cope with disruption, providing the ability to flex with customer demands, and accelerating digital transformation.
The key to accelerating the value Asset Managers realize from the cloud and lowering the risk involved in the migration process, is to agree a clear vision and understand the strategy it could take to become a cloud-enabled business. Rushed migrations without a clear strategy for realizing value, incomplete planning, or poor execution could end up costing the firm, especially when legacy systems are involved. For asset managers, a cloud strategy really has two key elements. The first one is driven by technology— to improve the efficiency and resilience of IT systems and to improve operations and time to market. Firms can realize significant cost savings by using new architectures or new applications in the cloud. The scalability of the cloud is also beneficial in managing demand volatility and other disruptive events.
The second element is business driven—a strategy focused on the business value firms want to achieve — enabling the business to do new things and do them faster. This is where the innovation, experimentation, responsiveness and business agility of the cloud come to the fore. For example, with Infrastructure as a Service (IaaS), infrastructure can be provisioned more easily, transforming productivity by allowing you to rapidly experiment with new ideas, test and learn, fail fast, then iterate, improve and scale up. At the same time, Platform as a Service (PaaS) and Software as a Service (SaaS) solutions could help you to leverage many cloud-native innovations “out of the box”, while unlocking more value from data with machine learning and other advanced tools.
While many firms initially focus their cloud transformation programs on IT and infrastructure, realizing business value needs to be a well-defined goal from the outset. The key is to keep both elements in mind. Migration to the cloud may be viewed as a cost-cutting move. However, recent research by Accenture regarding the “cloud continuum” found that companies whose migration strategies focus simply on cost reduction actually do a poorer job than those driven more by a business value agenda. The latter realize about 2X greater cost efficiencies than cost-cutters. At the same time, they are two-to-three times more likely to innovate and re-engineer knowledge work.
Only 8% of assets managers have successfully completed their cloud migration
A potential advantage offered to asset managers by the cloud is the ability to improve customer service. Firms need to think like their customers—who want a seamless, digital experience and the ability to view their assets across all advisors, for example one portal that allows them to manage their entire portfolio.
Operating in the cloud could also make it possible to use analytics and automation tools that could further improve customer service and deliver valuable insights and innovations. Cloud data platforms enable additional business value to be extracted from data using analytics and AI. Beyond automation, AI and machine learning are now supporting more complex thinking and knowledge work.
Another potential benefit of cloud technology is the ability to improve data management. Cloud migrations provide the opportunity for asset managers to shift their data “center of gravity” away from on-premise, providing enhanced security, borderless data sharing and the ability to derive insights from their data more quickly.
How can asset management firms seek tangible benefits from migrating to the cloud based on identified value drivers? Here are some things to bear in mind:
A well-planned migration to the cloud should also consider the future. What is the impact on the operating model and does it need to change? How can day-to-day active management and optimization drive ongoing value for the business? Are the skills and expertise required embedded throughout the firm to move quickly beyond the migration itself and start exploiting the higher-order services available in the cloud? Above all is the evolution to new business models needed to thrive in the future, creating a platform for innovation, enabling advanced digital technologies, and experimenting with new products and services.
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