Buy-Side Concerns in Focus
Northern Trust Survey: Asset Managers Most Concerned about Managing Rising Costs and Driving Bottom Line Performance amid Global Market Turmoil
Global survey of 300 investment managers reinforces the value of Whole Office solutions for achieving greater efficiency and resiliency in investment operations
CHICAGO and LONDON, June 16, 2020 – Investment managers are most concerned about controlling costs in volatile markets, followed closely by a focus on risk and compliance issues and support for expansion into markets beyond their home country, according to the survey of 300 global asset management firms sponsored by Northern Trust.
Northern Trust today issued a white paper, Driving Growth in Asset Management: Solutions for the Whole Office in 2020 and Beyond, that offers insights into how managers can control costs while increasing their distribution by leveraging technology, outsourcing functions that may not be core to their investment process, and viewing their operations holistically, as a whole office, rather than in silos of front, middle and back office functions.
“Driving profitable growth beyond 2020 will require more than finding new streams of revenue or reducing costs,” said Ryan Burns, head of Global Fund Services (GFS), North America. “The most successful asset managers are rethinking their operating models from the perspective of their whole office, seeking holistic changes such as outsourcing that can help them grow their businesses.”
The survey, conducted for Northern Trust by WBR Insights, shows asset managers struggling to balance growth strategies with escalating costs and fee pressures: 87% of respondents said their key strategic priority for the next two years will be controlling costs, but nearly as many (86%) also plan to focus on risk, compliance and resiliency and 85% said supporting expansion into new markets was a top priority.
Managers are looking at a range of outsourcing options to drive efficient growth and strengthen key processes. For example, 85% of respondents have either already outsourced their trading desk or are interested in doing so in the future. Nearly half (45%) are considering outsourcing data management in the next two years while approximately one-third are considering outsourcing foreign exchange and middle office functions.
“Asset managers today want true flexibility to choose the best partners for their investment processes,” says Clive Bellows, head of GFS EMEA. “For example, they want to be able to select an order management system, or a foreign exchange provider, or a trading solution that fits the way they work. Decisions that ultimately help drive Alpha today are focussed on optionality and interoperability.”
The survey also revealed that 64% of respondents plan to achieve their strategic priorities by leveraging new technologies. However, investing in next generation technology such as AI, machine learning and cloud-based data management solutions comes with a cost that can be prohibitive when firms are seeking to control expenses.
“Our clients’ are proactively thinking of how to streamline their operations, and they have turned to outsourced providers like Northern Trust who can help them leverage technology to suit their business goals and objectives,” says Caroline Higgins, head of GFS APAC. “This is about providers who are able to give managers access to digital tools that automate workflows and facilitate self-service whilst providing the intra-day data and analytics they need for informed decision making.”
The white paper Driving Growth in Asset Management: Solutions for the Whole Office in 2020 and Beyond can be accessed here.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2020, Northern Trust had assets under custody/administration of US $10.9 trillion, and assets under management of US $1.1 trillion. For more than 130 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South LaSalle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at http://www.northerntrust.com/disclosures.
33 years into his career, Michael Ray of Adams Funds still takes it one day at a time.
Calastone created a DLT-based platform to make the fund transaction process more efficient.
The acquisition will double the number of customers for Fidelity’s Personal Investing business.
The asset manager plans to use Curv’s infrastructure to expand into the burgeoning digital asset market.
EU firms must disclose how sustainability risk is integrated into investment decisions for products.