Asset Managers Get a Digital Boost

By Michael Patanella & Mike Pilch, Grant Thornton

Tech delivers efficiencies, better client experiences

Digital transformation is providing asset management firms with tools to satisfy many of the global, universal, constant objectives that they face in their operations:

  • Investors always want more detailed information about their investments and the ability to stress test different market risks.
  • Investment managers constantly are looking for ways to improve their investment decisions.
  • Legacy systems often need upgrading while operations need to be improved to help firms serve clients effectively and provide more timely and relevant insight.

Finding a way

Digital investments can make sense in any economy

These aren’t the easiest times for asset management firms to come up with the funding for digital transformation. The market downturn experienced over the past year and recent weeks has taken a heavy toll on firms’ revenue and has made it tempting to move technology investments down on the list of immediate priorities.

But Michael Patanella, National Managing Partner, Asset Management for Grant Thornton LLP, cautions against an impulsive reaction that could leave a firm at a competitive disadvantage.

“Getting some of that initial cash outlay and then over time getting the ROI from that investment can make better sense for the long term,” Patanella said. “We’ve seen firms get technology investments approved in good and bad markets, where you’re able to show ROI and also repurpose individuals’ responsibilities to make them more additive to the firm’s business and satisfied with their day-to-day activities.”

Finance leaders — regardless of industry — concur with that view. Four out of five respondents to Grant Thornton’s CFO survey for the fourth quarter of 2022 said they plan to increase investments in digital transformation over the next year.

Mike Pilch, a Managing Director in Grant Thornton’s Transformation practice, said that in this economic climate, firms are assessing and mapping out their large-scale digital transformation priorities so that they’ll be ready for deployment when the downturn abates. Rather than tackling large projects, they are spending on modestly priced technology initiatives that can provide incremental value through the automation of certain processes.

“How can they gain efficiencies so that when they’re coming out of this downturn, they’re ready to operate as efficiently as possible?” Pilch said. “As you know, organizations are looking to cut operating expenses. Sometimes that means cutting people, and sometimes the systems you put in place can drive automation and drive efficiencies and processes that will move those synergies forward from a cost perspective.”