Investment in technology and data infrastructure are the top priorities for asset managers post-pandemic, according to the new report by Funds Europe for banking software company Temenos.
The report found that 56% of respondents were prioritising investing in technology, and almost half (47%) said their priority was on ensuring environmental, social and corporate governance (ESG) compliance. The report also revealed that the pandemic played a large role in causing firms to reassess their IT strategies and move towards cloud-based systems and artificial intelligence (AI). Barry Lee, business solutions director at Temenos Multifonds, commented on the report’s findings:
“In mapping out the road to recovery, asset servicing firms and fund managers are increasingly looking to take advantage of the tools, analytics and scalability of the cloud.”
“Temenos’ SaaS-based Explainable AI (XAI), for example, enables our fund administrator clients to use AI to reduce manual interventions, detect potential breakdowns in workflow, and speed up exception management related to price movements. This future-proofs their operations against black-swan events and increases overall efficiency and productivity.”
Another key theme from the report was firms wanting greater interconnection between functions along the investment value chain. In the survey, 83% of asset managers said they intended to extend alliances with asset servicing and tech partners.
AI and Machine Learning are also set to play a large role in delivering insights for firms. The top applications for AI are portfolio analytics and performance measurement (60%), data sourcing, cleansing and enrichment (57%), and improving the operational efficiency of middle- and back-office processes (56%).
However, 60% of respondents said their priority would be to incorporate human expertise into AI models. This capability will make it easier to deliver business intelligence in a way that is understandable to product teams, customers and financial supervisors.
Temenos’s cloud-based software is currently used by over 3000 banks around the world, processing transactions and client interactions for more than 1.2bn customers.