Published by Jessica Weisman-Pitts
Posted on February 16, 2022
4 min readLast updated: February 9, 2026
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By Thomas Chevalier, Executive Director, Temenos Multifonds
The asset management industry as we know it has changed forever, and for the last two years, the industry has faced a time of unprecedented demands that will ultimately produce new winners and losers.
In a report last year, The Boston Consulting Group (BCG) stated that the asset management world had emerged from the global pandemic in a position of strength; investors had amassed more capital, were more confident and more risk averse. This led to new interest in asset classes such as alternatives, and investing in new geographies, which both quickly have become vital to business growth.
Even as the 2022 begins, we already see this alternatives trend, particularly in private equity, emerging across the globe*. Additionally, whilst many asset management firms were lagging behind the fast-paced innovation taking place in the banking world, now we are beginning to see a landscape of asset managers who have taken the leap to digitise their businesses, from adopting robo-advisors to digital investor onboarding and self-serve client portals.
As the medium-term outlook continues to improve, tomorrow’s winners will be the ones most prepared for this multifaceted change in. Key to this will be two business strategies:
Technology’s competitive edge
For the vast majority of firms, investment in new technology has begun with the low hanging fruit, typically robot process automation (RPA), with one of the biggest impacts being the decrease of reliance on offshoring and the outsourcing of key functions, i.e., IT engineers.
As we know, many back-office processes are very labour-intensive, but with evolving artificial intelligence (AI) models, and new levels of automation increasing straight through processing (STP), there is huge potential to move away from offshoring and only keeping on staff who are process experts or accounting experts. Thus, increasing the effectiveness and efficiency of service delivery.
Beyond automating processes, many back-office operations use fragmented IT platforms, with teams that are still methodically replacing the pieces of the puzzle. Instead, the industry needs to invest in developing an integrated framework so that all of the disparate elements of front, middle and back office can communicate with each other. This requires a sophisticated Application Programming Interface (API) framework, around the core, to seamlessly integrate internal and external applications.
If we’re honest with ourselves, we know back office operations and in particular platforms like fund accounting systems are rarely the areas that attract innovation. Instead, innovation is usually focused on the front office (market-facing, end-client engagement, distribution channels, investment decision making). For the back office, there are no start-ups entering the market and forcing the pace of change in the same way we have seen in the front office, therefore the onus is on investment firms themselves to jump before they are pushed.
It is essential that asset managers are planning for the future and calling for their boards to invest in their technology infrastructure and integration. Without it, the demand for increasingly sophisticated solutions from investors across a host of asset classes, capabilities and geographies cannot be met. Instead, in three to four years from those asset managers who fail to invest, will be left behind.
Asset management is the systematic process of developing, operating, maintaining, and selling assets in a cost-effective manner. It involves managing investments on behalf of clients to achieve specific financial goals.
Alternatives in investing refer to asset classes that fall outside of traditional investments like stocks and bonds. This includes real estate, private equity, hedge funds, and commodities.
Digital transformation in finance involves integrating digital technology into all areas of financial services, fundamentally changing how businesses operate and deliver value to customers.
ESG stands for Environmental, Social, and Governance. It refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business.
Robo-advisory is an automated service that provides financial planning and investment management advice with minimal human intervention, often using algorithms and technology.
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