Buy-side investment firms comprise many actors—from traditional asset managers, to self-managing pension schemes, to life assurance houses, to retail brokerages. Yet, across the board, firms are facing a sea of change, including changing investor expectations for personalization, product diversity and higher returns, increasing regulation, margin pressures and technological disruptions. All of these changes are creating an unprecedented need for flexibility and scale, despite the legacy limitation.
On the retail side, digital consumerism is starting to make big waves. Consumers want more control, better tools and increased transparency—all delivered in a much more timely manner. With the growth in the mass-affluent market and significant generational transfer of wealth, there is a new demand for digital, consumer-based services. The traditional models of doing business are shifting to deliver personalized services without relationship managers and advisors.
As buy-side companies move and invest in digital-first models and capabilities, the “digital advisory model” is emerging. With this model, technology will be used to help on-board customers, as well as offer them a fully digital environment where they can set goals, receive information and manage their portfolio and wealth in real time. Meanwhile, on the back end, firms are looking to re-platform, improve straight-through processing, increase the consumption of technology as a service and drive operational efficiency through the reduction of manual processes.