Since the outbreak of Covid-19, the business landscape across the globe has taken a dramatic shift and we are now faced with a new frontier in the form of working from home and also transacting, communicating, and socialising digitally at a level unimaginable at the start of 2020.
At the same time, there's also now an increasing trend of asset managers going digital via the launch of online platforms. The back drop to this is also that capturing a millennial client base has become increasingly important in the asset management industry as statistics suggest that the millennial age group present an often underestimated source of revenue. As a result of Covid-19, we will possibly see an acceleration of these digital transformation projects since the key to capturing this young client base is often a strong digital or online offering, with apps and online platforms being a useful gateway for these tech-savvy investors.
This is also reflective of the fact that many predict that businesses with a strong digital offering will grow the most market share coming out of Covid – 19 with more products now being sold digitally than ever before. As a result of the pandemic everyone has been forced to start using online services and to be educated in working and communicating in a new way, and arguably we’re unlikely to pedal back to where we were before. Those business that will really benefit are those communicating seamlessly with their customers online and with good user experience.
This means we’ll probably see more investment in tech platforms than we have in the past. Firms will also need to be mindful of ensuring that their contracts for the procurement of these new technologies are properly equipped from an intellectual property, data protection and business continuity perspective.
The asset management industry, far from one of the most digitally-savvy parts of the economy, starts from a position of weakness relative to other sectors. Mr Chancellor says that the fast rate of digital progress in other parts of the corporate world will put pressure on fund managers to innovate fast. “Once everything is online the baseline is not what your competitors are doing but the last best experience anywhere — the baseline will move up fast,” he says. He predicts the switch to online client servicing will lead to a war for digital talent as asset managers build slick virtual engagement set-ups. “The virus has hit the reset button on how asset managers engage with their clients. The longer that this goes on, the more inventive managers are going to get and the more they are going to invest.”