Automation in the Asset Management Industry: Time for a Reboot

Anthony Boakye-Mensah, Darren Chim

Automation is a hot topic within the asset management industry and has been for some time across the front, middle and back office. Our 2020 AM Digital Readiness Survey highlights that organisations are continuing to experiment with APIs, workflow tools, low-code process automation platforms and RPA in an effort to transform operating models, realise the cost savings, reduce risk and improve customer experience.



Right: Investment in Automation Technologies, Alpha FMC Digital Readiness Survey 2020

Industry experience with automation so far

Despite the continued interest in, and perceived benefits of, automation, there appears to have been limited practical success in adopting these technologies within asset management. This is particularly clear when compared to other financial services industries such as retail banking, investment banking, and insurance. Specifically, we have observed that:

  1. Workflow tools have been known to complicate processes and increase turnaround time.
  2. Process automation is fragmented in most firms. It has been done in silos to solve discrete problems and therefore is not always aligned to a firm’s overall strategy

Whilst these limitations are not the experience for all organisations, they do provide insight into why industry adoption of automation technology is low.

The RPA revolution has not happened

Robotic Process Automation has not penetrated the asset management operating model as expected. Organisations that have conducted RPA proof-of-concepts have not moved to full implementations as results have not led to a compelling business case. ROI in RPA appears difficult to come by due to a low volume of repeatable processes within the operating model of asset managers.

Why automation is still important

Asset managers continue to grapple with margin pressures, regulatory scrutiny and demand for digital solutions. Successful automation initiatives could solve some of these challenges, and therefore decision makers cannot simply ignore or discard them. The continued importance of data for organisations and cultural changes as a result of COVID-19 mean that asset managers also need to look at how automation can be introduced into operating models to effectively harness data and ensure efficient business continuity.

These drivers are forcing Asset Managers to ask themselves the following key questions:

  • How should I be approaching automation?
  • Which processes respond best to automation?
  • What should I be doing next?

How should I be approaching automation?

First and foremost, it is vital to understand each process step in the workflow and make it as lean as possible before applying automation. This is to guard against automating inefficient processes, which will magnify the errors and result in costly rework further down the line.

Once process optimisation has taken place, the use cases for automation need to be identified and prioritised based on the highest value to the user. Collaboration between Business and Technology functions is crucial to input into the automation solution, since the chosen software will become part of the IT estate if successful. Finally, a proof of concept or trial period should be run in partnership with the automation provider and internal teams to gain early sight of the automated solution and the potential benefits when applied to a process. 

Which processes respond best to automation?

Historically, the best use cases have been processes which are stable, highly manual and repetitive, and carry a degree of high risk. Whilst this continues to be relevant, automation is increasingly being organised around an overall strategy such as improving the Client Experience. This is supported by our 2020 AM Digital Readiness Survey where we see client facing areas such as Client Reporting, Sales Enablement and Onboarding benefitting most from automation. This is a shift from siloed automation that solves discrete problems within a specific business function to automation that covers end-to-end processes involving multiple business teams with enterprise-wide coordination.


What should I be doing next?

There are four steps Asset Managers should take now to drive greater levels of automation. These are built on Agile methodologies which deliver change by getting ideas to market more quickly, and creating solutions that are more attuned to the needs of users.

  1. Define the vision for automation – develop the overall automation strategy and articulate the role of automation within the organisation, and how it adds value and benefit.
  2. Select the automation use cases – create a backlog of processes for automation and group into themes, before picking the use cases which will deliver the highest-value items for the user
  3. Develop the candidate MVP – design, build, and test a small-scale automation solution. Gather feedback quickly from users for iterative development
  4. Scale out successful outcomes – use the findings from the MVP to finalise the solution and start to apply automation to more areas of the organisation

Automation spans multiple functions and requires a joined-up approach to deliver scale and efficiency. Asset Managers need to ensure they are organised around this with the right strategy, structure, skillsets, processes and technology.

Here at Alpha, we are experts in supporting clients with their Automation journey. If you would like to find out more about the topics raised in this article or would like to discuss the Automation challenges faced by your organisation, please get in touch.

About the Authors

Anthony Boakye-Mensah

Anthony is a Manager at Alpha with over nine years' experience within asset and wealth management. He has experience in helping clients optimise processes across multiple functional areas using industry recognised enterprise systems and low-code technology.

Darren Chim

Darren is a Manager at Alpha with more than 8 years Financial Services and Consulting experience. He has delivered Distribution and Digital transformation projects covering a mix of sales and marketing strategy, client experience, organisational design, and implementing new ways of working. He has successfully managed the review of a new digital and marketing operating model for a global asset manager to support the integration following a merger, and has previously led the design of the UK Distribution operating model at a global manager which involved conducting market analysis and designing a new data-led client segmentation model to support a new proposition strategy to improve sales effectiveness.