Mark Walsh is Head of Milestone Group, a provider of automation technology for the investment industry.

Looking back, what do you think 2024 will be remembered for from a fund management perspective?

2024 was the year of consolidation, focusing on investment specialization (a tale of the ramping up of Alternatives, such as Private Credit strategies and active ETFs) and a focus on how firms can enable these investment strategies using core competencies, technology and platforms, alongside their specialized partners and centres of expertise.

A year to focus on what “resilience” means to firms and their investors – macroeconomic environments have proven to be unpredictable, inflation is still high, coupled with interest rates.

Cyber is still a sharp focus for many, as the pace of keeping up with investing into cyber security, coupled with the rate of potential tech-based failure (think Crowdstrike) and contagion these events can have on a globally connected financial market.

A year of Gen AI use cases – but the “rubber hasn’t hit the road yet” – but it will and when it does it will accelerate the rate of growth, progress and drive investment outcomes exponentially, and also see a realignment of the labor market.

Looking forward, what do you see being the major challenge(s) that your clients/prospective clients will face in 2025?

What makes a resilient business – and knowing that you have the building blocks to encounter shocks and unpredictability in the market and environment.

It’s also about curbing costs and seeking value for money as you think about how to keep up with the pace of technological change and innovation. Value for money and cost transparency is also a key theme going into 2025, with increased scrutiny being placed on costs by the regulators. As a result, investors will be especially focused on achieving clarity around the true costs of investing in AI and its on-going use.

The role of market infrastructure will be key, and the robustness, transparency of the players that are in this space (Central Banks, Clearing Houses, Stick Exchanges, Banks etc).

Government and politically driven change and shift in policies, driven by a change in voter sentiment across the globe in a post pandemic environment across multiple countries will impact the way the funds management industry will respond to new Governments, Public Policy and public opinion (a lot of major markets have already helped elections or are due to next year).

With tighter regulations on fair valuation and ongoing reliance on manual processes, asset managers face rising compliance burdens. What do they need to do in order to get ahead of this challenge?

Many firms still rely on disparate systems, spreadsheets, and manual processes, making compliance with regulations like Rule 2a-5 challenging. Innovative fair value technology offers fund managers a chance to streamline this complexity by enhancing efficiency, automating processes, and providing detailed audit trails. This transition not only alleviates the workload on staff responsible for overseeing securities valuations and reporting but also significantly reduces the risk of errors.