One-in-four senior asset management executives believe it’s highly likely they’ll face direct competition from a non-traditional new entrant, such as a technology or non-financial services company within the next five years, finds a State Street report.
The global survey of 400 senior asset management executives also finds a further 54% believe this threat is somewhat likely.
Despite the emergence of new entrants, asset managers are in a positive mood, with 42% preparing to enter a new product category for the first time; 52% planning to expand distribution networks; and 48% tapping new distribution channels.
“As new entrants eye the sector, success will increasingly depend on technology and data analytics to address the growing demands of clients for more personalized and sophisticated information and investment solutions,” says Jane Mancini, senior vice president and head of asset manager sector solutions at State Street.
Focus on risk
Additional findings from the survey:
- 70% say they have to rethink their business strategies around demand for multi-asset strategies;
- 64% say heightened risk and compliance demands threaten to divert resources from critical business areas;
- 96% say they’re under pressure to reduce costs;
- 77% now offer clients more transparency on risk and return compared to a year ago;
- 61% say clients are demanding a more personalized approach to help them understand their risks compared to a year ago; and
- 72% say their conversations with clients has evolved to focus more heavily on risk compared to a year ago.