Asset management is the most confident sector in financial services but despite 65% of CEOs saying technology will “reshape” competition in next five years, only 10% are prioritising it.
A poll of 185 asset and wealth management CEOs by consultancy PwC revealed that while two-thirds are concerned that the speed of technological change may be a threat to growth, only 10% are planning to strengthen their digital capabilities.
But 92% of those surveyed were confident about growth over the coming year, with over half (52%) planning strategic alliances or joint ventures and 41% planning a merger or acquisition to drive profitability.
PwC also found that there was an unwillingness to collaborate with start-ups, only 27% would consider it. PwC viewed this as “confirming the sector’s reluctance to innovate and tap into an area known for its agility and highly sought skillsets”.
In terms of recruitment into the industry, 68% said they have changed their strategy people to hire, develop and retain future skills. Attracting people to the industry might prove difficult as 62% said it has become more difficult to gain and retain trust in the sector, reflecting a financial services-wide concern about falling levels of trust in business.
PwC found that there was a shift in what asset management firms’ CEOs viewed to be “key markets”. This year, the US was seen as a key market, with just over half judging it to be the most important market outside their home market, compared to 39% last year.
China (28%), Germany (25%) and the UK (18%) also scored highly.
Mark Pugh, UK asset and wealth management leader at PwC, said that the sector is showing signs of being slow to innovate and adapt – particularly to technology and a changing customer base.
He added that there’s a “real risk” of firms being “swept aside” by those who have already started investing in digitalisation.
©2017 funds europe
