Silicon Valley is a blessing and curse to asset managers. On one hand, the innovation that comes from the Valley has been an important enabler across financial services. On the other hand, these companies may one day become formidable competitors—sooner than people might realize.
The barriers to entry in asset management are not high, and Silicon Valley already has its eye on ways to disrupt the industry. It is only a matter of when, not if, these new competitors will strike. To prepare, asset managers must work and partner in different ways to remain competitive. By taking lessons from these high-tech leaders, asset managers can “beat them at their own game,” and stay ahead in changing times.
Trends to embrace
Asset managers have historically succeeded by differentiating themselves in the way they develop and distribute products, manage assets and deliver client service. As Silicon Valley looms, new approaches are critical:
- Develop ecosystems. Asset managers should view their investor interaction model from an ecosystem perspective to engage with investors comprehensively. Digital platforms allow firms to expand from linear interactions, and they enable complementary offerings and integration with external partners. Taking it a step further, the goal is an ecosystem where personal devices are integrated and continuously accessible.
- Capture new markets. Rather than expand with brick-and-mortar offices, asset managers should leverage technology to scale across time zones and languages. Advances in artificial intelligence, such as machine learning, could be leveraged to enable scale. To compete, asset managers must also continue to invest in their technology infrastructure and build relationships with global partners.
- Win the data game. Asset managers need to stay ahead of the artificial intelligence curve. Advances in these technologies, such as deep learning and natural language processing, have increased portfolio managers’ ability to cipher through copious amounts of data. This is already a trend across the industry and will continue to evolve.
Harness the power of digital
Accenture is well positioned to help asset management firms navigate the challenges and opportunities of disruption. In addition to working across industries to help our clients harness the power of digital to create new business value, we bring deep investment management and industry-leading technology experience. This combination provides clients unique insight into designing an operating model using new technologies and applying it successfully in financial services. Interested in discussing your plans?