Increased regulation, rising costs, changing user behaviors and expectations... the financial sector has been undergoing profound changes in recent years. What are the main trends set to transform the asset management market in 2020? Find out more.
Spending on public cloud offerings
Initially reluctant to outsource their IT services, management companies are gradually moving to the cloud. Cloud computing players seem to have responded to their concerns by improving data security, encryption and isolation techniques used within data centers. And there is no shortage of arguments in favor of using this technology: faster deployment and return on investment, lower cost of ownership... The cloud is fully in line with asset managers' desire to achieve economies of scale and refocus on their core business.
Accelerating digital transformation with APIs
Digitization is affecting the entire value chain of financial companies. To accelerate their transformation, asset management companies can now integrate digital platforms via APIs (Application Programming Interfaces). APIs bringagility, security and value-added services to customers. In general, they foster innovation in the financial sector.
Factoring social and environmental impact into investment decisions
In the world of asset management, impact investing accounted for €108 billion in assets under management at the end of 2017 in Europe, according to a Eurosif study. Since 2011, the sector has seen significant growth, averaging 50% a year. In 2020,responsible investment should continue to gain in popularity in Europe, with asset management companies increasingly communicating about the transformation of their fund offering to take account of ESG criteria (environment, social, governance) and meet investor expectations.
Increasing outsourcing of front-office functions
Faced with increasing regulation, notably with the roll-out of Emir (European Market Infrastructure Regulation) and the application of the AIFM (Alternative Investment Fund Manager) directive, asset managers have had to resort to outsourcing back- and middle-office functions. In 2020, front-office functions will be increasingly outsourced in order to cut costs and streamline operations.
The use of Artificial Intelligence
The asset management sector has often been a forerunner in the use of AI. Thanks to these solutions, companies can make the most of the information at their disposal and fine-tune forecasts of market trends. Some, for example, use Artificial Intelligence to read thousands of articles per hour and provide market sentiment indicators.
Linedata, a company specializing in the publishing and integration of software packages for the finance sector, is registering growing interest in the application of Machine Learning, a subset of AI, in the middle-office. Its adoption is set to continue over the next few years.