Differentiating Your Business with Technology: A Roadmap for Asset Managers

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.

How technology can help differentiate your business

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. 

Distinguish your business by supporting interoperability

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.

Outclass your competition with personalized product offerings

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.

Leverage technology to prepare for industry transitions

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.

Building a technology ecosystem with partners and vendors

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.