Differentiating Your Business with Technology: A Roadmap for Asset Managers
February 21, 2025
Read Time: 5 minutes
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Alex DobsonSenior Vice President, Head of Product US
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The ability to leverage technology can become a powerful differentiator for an asset manager facing increasing demands for efficiency, compliance, and value creation. However, with the quick pace of technological change, how can asset managers ensure their technology investments are both impactful and sustainable? And how do firms strike the right balance between growing their business and modernizing operations, all while adapting to industry and customer demands that can change rather quickly?
As with any business transformation, involving key stakeholders from the beginning helps ensure that everyone is aligned with the technology’s purpose and capabilities. Stakeholder input allows asset managers to identify potential roadblocks or concerns before they become costly issues. For example, understanding the compliance and regulatory requirements early in the process can help avoid delays or rework later on. Similarly, involving the business team early ensures the technology solutions being considered meet end-user needs and support the broader business strategy.
By bringing together a cross-functional team of stakeholders, including front-, middle-, and back-office teams, leadership and decision-makers, and IT and data teams, asset managers can create a shared vision for the technology implementation. Most importantly, firms will feel confidently prepared to meet the needs of their business, clients, and partners.
Research from Accenture published in 2021 found that industry respondents expected technology modernization would be a major differentiator for firms in 2025.1 Yet, fast forward to today and the idea of digital transformation continues to be just that for many firms — an idea. 2023 research from the Greenwich Coalition2 found that asset managers sought to improve areas such as technology and operations, but did not have plans to implement larger scale redesigns. A 2024 study from Clearwater Analytics found that 74% of insurance companies still depend on legacy systems for core functions.3
We could wax poetic about how updating infrastructure enables faster decision-making, better risk management, and operational efficiencies.
But as you most certainly know, modernizing systems and data architecture is easier said than done.
While most asset managers can easily acknowledge the importance of transforming operations, firms are also keenly aware of the risk of creating another complex ecosystem filled with specialized systems that are difficult and expensive to operate, maintain, and update — exactly the challenge many companies currently face.
Tack on worry about the significant costs and disruptions of migrating away from legacy systems, particularly when considering security, compliance, and regulatory demands, and it’s easy to see why firms can feel hamstrung by their legacy tools. But when you’re ready to embrace new systems, technology is also what will help get your data in order, speed up reporting, and differentiate your business to stand out in a market contending with fee compression, rising costs, and relentless demand to meet client expectations.
By integrating cloud-based data systems, companies can streamline data flows to improve accessibility, resilience, and scalability. This shift allows institutions to better respond to changing market demands and regulatory environments while optimizing their data management processes for greater efficiency and accuracy.
With an interoperable system, a manager could integrate their portfolio management system with advanced market analytics tools and a client-facing digital portal. While a competitor may offer only static quarterly reports, you can deliver real-time portfolio insights, personalized analytics, and interactive dashboards that allow clients to explore performance data in detail. This level of transparency and personalization not only enhances the client experience but also positions your firm as a technology-forward, client-centric provider in the market.
Cloud-based solutions also support automation and AI integration, helping reduce manual errors and generate faster insights. The enhanced interoperability allows companies to integrate with external platforms, improving collaboration with clients and partners and making it easier to scale operations.
Advanced data management systems and cloud-based technologies can give you deeper insights into your client preferences and behaviors. For example, predictive analytics could help your teams analyze investor risk tolerance and market trends and design investment portfolios that align with individual client goals. Or say an unexpected event happens in the market. Technology can help your teams understand the impact on a specific portfolio and even generate personalized messages to help your client-facing teams communicate how these changes might impact specific portfolios.
Enhanced data visibility allows for tailored products and services that align to specific client needs, offering customized investment strategies, personalized reporting, and more responsive client service. These bespoke solutions can promote client satisfaction and loyalty, and position your firm as a forward-thinking, client-centric leader.
Regulatory frameworks are always changing, and asset managers must ensure their technology investments help them adhere to requirements while minimizing operational risks. Take the industry-wide adoption of T+1 settlement cycle, for instance. M&A activity or the launch of a new business line can also introduce different regulations that firms need to prepare for.
If we look beyond regulations, trends such as the growing importance of ESG analytics are also forcing firms to adapt. By leveraging technology to streamline processes, asset managers can reduce the risk of human error, improve auditability, and enhance data security.
By taking a proactive approach to industry shifts and building flexibility into their technology stack, asset managers can position themselves to capitalize on new opportunities and minimize disruption during times of change.
Today’s asset managers don’t operate in isolation — they are part of an interconnected ecosystem of clients, partners, and technology vendors. A 2024 study from Bank of New York Mellon found that 85% of asset managers and owners are increasing their reliance on core finance service providers or streamlining with a few best-of-suite vendors and providers.4
As asset managers grow, launch new products, acquire new lines of business, and move in and out of new strategies, they often work with multiple vendors, custodians, and platforms, each of which has its own set of systems and processes. An asset manager looking to integrate ESG analytics into their investment strategies might partner with a specialized ESG data provider. With open APIs and robust integration capabilities, a manager can seamlessly incorporate ESG data into their analytics and reporting workflows, enabling their firm to deliver differentiated ESG-focused products to clients.
When selecting technology solutions, asset managers should prioritize platforms that are open and interoperable, allowing for easy integration with existing systems. Vendors that support open standards and offer flexible integration options enable asset managers to create an ecosystem that can evolve over time. Interoperability ensures you have the right tools to work effectively with clients and partners, support cross-team collaboration, streamline workflows, and enhance the overall user experience.
The era of technology has brought financial product innovation and novel ways to help firms keep up with the market changes. But the pace of innovation can be overwhelming. Tools such as AI, quant computing, blockchain, robotics, and cloud technology may not have been around when your firm developed its operating system. So how can you be confident you’ll be prepared for the next round of technology innovation?
Prioritizing flexibility and interoperability will help you build a technology foundation that supports long-term growth and helps you continue to drive the value that your clients demand. As the investment management industry continues to evolve, firms that can leverage technology to streamline operations, improve data management, and create a connected ecosystem will be the ones that stand out in the marketplace.
But differentiating your business requires more than just adopting the latest tools and platforms. Financial institutions face growing pressure to support innovation and meet always-changing industry demands. As investors increasingly prioritize technology as a differentiator, choosing the right data architecture has never been more critical.
Our on-demand webinar offers practical insights and strategies to help you design and implement a modern data architecture tailored to your organization’s unique needs.
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