Research from Alpha FMC, the asset and wealth management consultancy, shows that Dutch firms see the benefits of digital, but lag behind other European asset managers in allocating resources. Their levels of investment in digital are limited, while they do recognise the many opportunities it can offer. Half of the respondents mention that digital is gaining importance, with over 80% stating to be “getting organised”. However, a small number of them feel that their digital maturity is “frustratingly fragmented” and that they are beginning to lag behind other European firms.
Alpha FMC surveyed 40 of the largest asset management firms in Europe – of which six are in the Netherlands – to understand the state of digital readiness. Respondents include a mix of CMO’s, Digital Directors, Chief Digital Officers, Information Managers and Technology Leaders.
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Shifting from product-centric to client-centric
The research highlights that the industry is moving from a product-centric view to a focus on the client. Although money is still invested in automating back-office processes (STP), we do see that the spend is moving to improving the customer experience, cloud computing and surfacing data efficiently. This is helping to get firms ready for broader industry changes.
All respondents said that improved client engagement was a key benefit of digital transformation. This is highly correlated with increasing revenues and AUM. An improved client experience is considered to be key to winning new mandates and engaging distribution partners, as well as retaining clients. Firms are looking to achieve economies of scale. In order to be able achieve this, and manage a wide range of client types, they need to adopt a Service Design approach and work collaboratively with marketing and sales teams to design client journeys.
Main barriers to becoming a digital innovator
So what is stopping asset managers in transforming their business? Almost all respondents see a lack of funding and/or a lack of priority as a main challenge, followed by legacy technology (67%), no clear digital strategy (67%) and a lack of resources or relevant skill sets (50%).
Questions are also being raised as to whether the digital department should report directly into business, as the profile and importance attached to it as a discipline means it needs to move away from a sub-department under the Marketing and Technology banner.
Adopting a new way of working
Of those surveyed, 50% identified culture as being a leading challenge to advancing the digital agenda. “Pockets” of agile ways of working were evident in a number of firms, and only a few had pushed through a broader Agile transformation agenda. For many, this was still new and adopted in siloed functions (e.g. technology) only.
Cooperation with FinTechs could help firms to move towards a more innovation-led environment, increase delivery capabilities and fuel the Agile transformation. However, none of the firms have invested in external FinTech and only 17% are focused on investing in FinTechs / RegTechs, which range from robo-advice, to AI and educational platforms.
Alpha FMC Digital Readiness Survey 2019
Alpha FMC will initiate the 2019 edition of the survey shortly. If you are interested in learning more or participating please contact Arie Verburg (firstname.lastname@example.org)