Investment in digital transformation is a top priority for asset management according to new survey by Funds Global released by Temenos

Insights, September 9, 2019

Temenos – Company

GENEVA, Switzerland – SEPTEMBER 4, 2019 – Temenos (SIX: TEMN), the banking software company, today announced the publication of a new report in partnership with Funds Europe and Funds Global, investigating the views and intentions of the asset management industry over the coming 12 months. According to the report digital transformation is a top priority for asset managers however the significant constraints imposed by legacy technology systems, were cited by 54% of respondents globally as a major problem holding them back.

The report entitled “Digital transformation in fund administration: The road ahead”, delves into responses from over 150 asset managers, fund administrators and custodians across Europe, the United States and Asia.

The global asset management industry is experiencing fundamental shifts that will shape its future. The report shows that digital transformation is set to play a large part in this future. The survey found that investment in new technology and digital transformation is the number one focus in asset management, with 38% of respondents saying it will be their firm’s biggest focus over the next 12 months. Digital transformation is followed by a focus on investment in product development (19%), operational efficiency (16%) and distribution (12%). An overwhelming majority of respondents, more than 90% of those surveyed, also said that investment in operational systems is now essential for asset managers to improve efficiencies and reduce costs. 29% of respondents cited data analytics as the highest priority for investment.

Despite the imperative to digitally transform, nearly a quarter of respondents (23%) said asset servicers, such as fund administrators and custodians, are not currently keeping pace with the changing requirements of asset managers. 54% of respondents globally cite legacy technology as a major problem holding asset management firms back from delivering high quality services through digital channels. In the US, this problem is even more exacerbated, with 60% of respondents saying that legacy systems remained a major problem.

The survey also highlighted that outsourcing of functions to asset servicers is set to narrow, with over two-thirds of those surveyed (68%) saying it was important to have one strategic service provider who can support all outsourcing requirements. Many respondent firms are already moving in this direction, with more than half (55%) saying that they have a single provider in place or will do so within three years.

Oded Weiss, Managing Director of Temenos, commented:

“The results of this latest survey are a clear wake-up call for asset servicers. With a backdrop of flat or declining profitability within the industry, asset managers are now demanding the tools and capabilities to drive innovation and deliver the right products and services quickly. While technology has moved forward in leaps and bounds, many fund administrators and custodians have lagged behind by not deploying the right digital infrastructure to realize the optimum efficiency they require to succeed. As technology and the industry continues to evolve, fund administrators and custodians will face a reality of survival of the fittest, and only those who can deliver digital transformation will thrive.

Temenos fund administration products enable our clients to not only achieve greater efficiencies and reduce costs but also take advantage of future opportunities by entering new markets, launching new and innovative services, and winning new business.”