The pace of the financial sector is much faster than ever before. Some emerging trends have already made their presence known in the industry, including fintech, technological innovations and digital currencies, to name a few, all of which are playing an influential role in global asset management.
This guide will discuss these developments and how they are changing the game in the financial space. What will the future hold in global asset management while the digital age continues to unveil innovative technologies that are changing the economic game and the world itself?
The Rise of Fintech Adoption
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Fintech has proven its worth as one of the revolutionary ways of delivering financial services to consumers. These solutions are considered among the best game changers in space. The reason for these types of technology is to enhance efficiency while reducing overall costs and improving the entire experience for every customer. Financial institutions such as the Bank of New York Mellon have played a role in the landscape changes of asset management through the use of fintech and relatable technologies.
Below are a few ideas of what we believe might be implemented now in the world of fintech and in the years that follow:
- Automation and artificial intelligence (AI) ─ Automation and AI are considered technological advancements that could benefit the financial space. AI-driven algorithms can analyze large amounts of data at high-speed rates. This will help asset managers make critical and more informed investment decisions. Advisors will use AI to help investors make the best decisions based on their personalized behaviors and manage their clients’ portfolios at a fraction of the price compared to what traditional advisors offer for those services.
- Blockchain technology ─ Blockchain technology has already made its mark in the digital space. This is all thanks to cryptocurrencies such as Bitcoin, which has become one of the alternatives to regular money in regard to payment methods. Because it is decentralized, it can also be an excellent investment for those who want to break away from traditional banking assets. It has greater transparency and security and can reduce errors and deter fraud. Asset managers also use the blockchain for various tasks, such as keeping records, regulatory compliance and settling trades.
Technological Advancements That Are Changing the Game
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Already, there have been some technological innovations that have been changing the game beyond what fintech has offered. Plenty of tools and platforms have played a role in asset management. They include but are not limited to the following:
- Big data and analytics ─ Big data and analytics will be more appreciated than ever before. The statistics they present will drive investors and asset managers to make the most critical decisions possible while keeping up with their investment strategies. As such, asset managers will be able to get deeper insights into how the market is trending along with how investors are behaving according to what they buy or sell. Productive analysis can forecast market movements while spotting potential investment opportunities.
- Cloud computing ─ This technology has fascinated many users, allowing them to access data and files anytime and anywhere, as long as they have the credentials. For asset management firms, it is a scalable and flexible solution that will also allow them to store all kinds of data while reducing any infrastructure costs they may currently have. With cloud-based platforms, they can share information with investors and others within their firm and collaborate on various investment opportunities. This solution will make efficiency and effectiveness possible for asset managers.
What Regulatory Challenges and Opportunities May Arise in Global Asset Management?
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Even though technological innovations are being adopted in the financial space, regulatory changes and opportunities could also arise. Regulators need to be aware of the changes that may be taking place in global asset management.
They will want to balance innovation and robust oversight before considering any amendment to current regulations or even implementing new ones. Too much regulation could stifle innovation, while less regulation could increase the overall risk throughout many major markets.
Nonetheless, the technological advancements unveiled in the financial space should also comply with the appropriate regulations, especially if they are utilizing AI, blockchain or data analytical technology.
RegTech, or regulatory technology, should be something that all financial firms within the industry utilize so that they can not only remain in compliance with such regulations but also avoid any financial challenges along with legal ones that could arise from non-compliance, even if they are inadvertent.
Final Thoughts
Global asset management will continue to evolve now and in the years to come as we continue our journey through the digital age. While some technological advancements have already been implemented, others may emerge from the shadows and are being tested rigorously to ensure that everything runs smoothly and efficiently for asset managers and investors alike.
The future is bright and exciting for the financial space and the technological innovations that are gaining the general public’s attention.
