SimCorp recently conducted a survey asking asset managers what they feel the year 2011 will bring about for them and their businesses. The survey reported that many asset managers expect to see a large increase in revenue and assets under management in the next year. This provides a great vote of confidence for the forthcoming year, however, at the same time, asset managers are recognizing that this expected growth means a need for new technological solutions.
Asset managers feel that growth is inevitable for 2011 and this growth will hopefully help business, but they are worried that growing quickly, along with new regulations, will put a large stress on front, middle and back-office operations. They know that the large growth and changing investment strategies will need “enterprise-wide solutions” to ensure that this is all beneficial and not harmful to the buy-side.
Currently the buy-side community relies heavily on manual processes. In fact 51% of asset managers surveyed by SimCorp said they rely on manual processes in their daily operations. This may be because 50% of those asked said that the systems they currently have in place only allow for moderate to no degree of automation for new reporting requirements. So while there is an obvious need for new technology in order to automate, could the increase of regulation in 2011 hurt the innovation process? 80% of the survey respondents seem to think so.
What is the buy-side to do? Growth is expected in 2011 but the lack of new technology and the promise of more regulation is making innovation difficult. So, are asset managers ready for what lies ahead?