This is the first in a series of posts which look at the major themes addressed at our recent event, The ALPIMA Year Ahead Summit.
- Digital Acceleration - The pandemic accelerated a wave that was already underway, that is the digitisation of people’s lives, from personal to professional. Many digital tools have now become the norm and won’t go away any time soon. Digitisation is driving evolution in Investment Management too, especially as it relates to increasing client access and productivity. Flexible technology and Big Data combine to drive industry change. 5G will add to this trend, resulting in raised customer expectations, and rapidly making older technology obsolete.
- Digitalisation is helping to make financial firms become more client-centric. New technology, such as ALPIMA, enables personalisation to a degree that would have been unimaginable only a few years go. Custom indexing has become a reality. This enables the industry to evolve from a product model, where many use the same vehicle/product, to a personalised service model, where every investor can create their own portfolio, strategy and custom index. The end-result will be a more client centric industry.
- Technology tends to push information to the surface, a trend likely to apply to investment management for years to come - The systematic investing toolbox, strengthened with Machine Learning and AI, allows for portfolios to be optimised for very specific requirements. For example, personal investor views and preferences on topics like ESG can be factored in to shape portfolio allocation. The underpinning models may not have changed very much, but today, technology is making them available to more investors, and a lot easier to use, which helps provide more personalisation. What is interesting, is that quant techniques are not replacing humans, but helping humans provide more customised service to their valued clients.
- East vs West – An interesting contrast was highlighted by ALPIMA board member David Baverez. He pointed out that Asset and Wealth Managers in the West have typically used technology as a means to increase efficiency by cutting back-office costs. By contrast, in the East, new technology is used more to digitise the Front-Office in order to deliver a more client-centric service, and to accelerate revenue growth.
At ALPIMA, we believe the front office is where digitisation will continue to add most value in years to come as the industry realises the importance of becoming more client-centric.
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