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Research Reports » The Future of Investment Operations Report

The future of investment operations

Abstract_cloudTechnology lies at the heart of the asset management industry’s responses to Covid-19 – and technology will be fundamental to its business recovery as the pandemic recedes. But how are the fund management and asset servicing communities adapting to this challenge? Which technology will they invest in? And what adjustments to their investment culture and operational frameworks does this require? 

Funds Europe, in association with Temenos, surveyed the industry to provide answers to these questions. Among its main findings:

Technology and operational requirements

  • 56% say that technology and data infrastructure will be the focus of their investment over the coming 12 months; 47% say this will be on ensuring ESG (environmental, social and governance) compliance across their product range.
  • 62% say cloud-based solutions are playing a key role in their IT strategy.
  • 40% have started to use APIs (application programming interfaces) in the past five years. Only 8% have used APIs for ten years or longer.

Strategic partners

  • 83% of asset managers say they will extend their strategic alliances with asset servicing and tech partners, enabling connection of mid- and back-office services straight to their front-office tools and investment book of record.
  • 42% say they will consolidate their outsourced relationships, employing a small number of service partners, in the coming two years.

Future developments

  • 60% say it is important to augment human expertise into artificial intelligence (AI) models; 50% say that AI must be ‘explainable’ to clients and to regulators.
  • 60% say portfolio analytics and performance measurement functions will benefit most from the application of machine learning (ML) and AI; 57% say this will offer most benefit to data pre-processing.

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