The Cost of Not Keeping Up with Change

In an environment where technology is constantly evolving, it is hard to ignore that change is all around us.  The emergence of cloud-native Investment Management Solutions (IMS), AI and digital assets are just a few examples.  Moreover, in a world where Asset Managers are laser-focused on delivering alpha to investors within a volatile market environment, it can feel like a daunting task to take a step back to evaluate how changes to the operating model can enable the business to deliver on key objectives.

However, for asset managers, the cost of not keeping up with change may come at a significant opportunity cost as the market for technology and services continues to rapidly evolve.

In this article, we look at four practical tips asset managers can take in order to keep up to date with rapidly evolving changes within asset management technology and services and avoid the cost of failure to keep up with change.

Take time to learn – “Knowledge is power”

Even if a mandate to procure a specific solution does not exist, it’s important to take the time to speak to peers, industry consultants and vendors alike to keep up-to-date with what is happening in the market.  Like learning a language, understanding the landscape of asset management technology and how it specifically relates to your business is not something that can be learned in a day. By keeping up to date, asset managers will be better prepared to engage confidently with internal stakeholders as well as prospective vendor partners when change is finally on the horizon.  By not having studied the landscape over time, it can be extremely challenging to develop the foresight to consider all critical variables needed to deliver a change management programme on time and on budget.

Motivate & Protect Valuable Members of Staff

It’s no secret that people are an organisation’s greatest asset.  Hence, it’s critical to keep valued staff motivated.  Could having a new cloud-native system provide a new learning opportunity for a member of staff within your team?  Does a new system create a career opportunity for someone in Operations to expand his or her role into Project Management as a part of the transition to a new system?  Staff who have been performing the same tasks for a long period of time may find it refreshing to embark on a new system project.  Especially during times of market volatility, a new project for valued members of staff might be just what it takes to protect these individuals from potentially looking outside of the organisation for new opportunities.

Reduce Costs

It’s hard to look at a new system as a means to cutting costs.  It is true that in the first year of implementing a solution, there could be an interim period by which two solutions (the incumbent and new solution) are used in parallel.  This can cause increased spend on technology in addition to the cost associated with allocating resources from your team to the change project.  However, modern, web-based platforms are often more efficient in terms of their use of hardware resources.  In other words, native web apps often cost less to the vendor to support.  Depending upon the level of service and functionality provided, this can translate to a lower cost of ownership to the asset manager, should the manager be operating deployed software.  Simply put, the move to modern web-based apps can enable asset managers to save costs once the new solution is in production.  In short, when evaluating the costs, it’s imperative to look at a 1+year time span.  You might be pleasantly surprised by the ROI of adopting modern platforms for your organisation.

Things seem fine, why change?

An asset manager may think that everything is fine as there are seldom errors with the NAV calculation or trade breaks.  However, it’s important to ask yourself “How much time and people resource is being allocated to performing daily operating tasks?”  Is your organisation performing 30 manual and timely tasks per day to make sure that the NAV is calculated correctly?  How would someone know that technology or outsourced services exist that could vastly increase STP and automation of manual tasks if the manager does not take the time to keep in touch with the market?  In this case, there is an opportunity cost of being left behind unknowingly, or even becoming obsolete at the extreme, due to not keeping up with change.

Summary

It’s clear that the asset management industry operates in a dynamic environment where technology constantly evolves. Failing to keep up with these changes can lead to missed opportunities and significant costs. This article has provided four practical tips for asset managers to stay updated with the evolving landscape of asset management technology and services. By taking the time to learn, motivating and protecting valuable staff, reducing costs through modern platforms, and avoiding complacency, asset managers can position themselves for success and avoid the risks associated with not keeping up with change. Embracing innovation and staying informed is crucial for asset managers to thrive in today's rapidly evolving market.

If you’d like to find out more about the benefits of adapting modern investment technology please contact us today to arrange a demo.