I continually remind myself that it’s important to be present and live in the moment; however, I can’t help from keeping a vigilant eye on the horizon and wondering what’s coming next. This has been especially evident lately as I’ve been drawn into multiple discussions about the present and future state of the asset management industry and which of the current hot innovations may or may not have long lasting impacts.
Realizing the benefits of emerging technologies all starts with having one’s data house in order. Recent conversations have made it clear that progress is being made in terms of recognizing the value of data across the industry. While there is still a way to go for a number of firms, the data platforms being implemented now are laying the foundation for the future. Improved technology solutions to ease data sourcing, mastering, validation, and distribution processes are more and more readily deployable. Operating models are being reconfigured to better align people and evolve skillsets to care for the data and support business consumption needs. However, the question remains at this inflection point: “Where do we go from here?”
Fortunately, there are a lot of bright and creative people asking this same question and actively working to find the answers. With a healthy data platform in place, one can begin to think about how to realize the benefits offered by emerging technologies. Daily articles on cutting edge technologies such as AI, RPA, cognitive computing, machine learning, and advanced analytics fill our screens. With all of these ideas fighting for our collective attention, a healthy sense of pragmatism and a fair amount of skepticism is needed to find real, practical applications of these concepts where meaningful impacts can be made.
While these are relatively early days in terms of mainstream adoption for many of the trending new technology concepts, there are solid use cases which are garnering budget dollars that will add to our toolkit of the future. Alternative data sources are becoming more available to gain unique investment insights. RPA is helping us collect data from unstructured sources with greater ease than ever. New graphical displays of data are helping investment analysts and risk managers more easily deconstruct data relationships in the never ending quest for alpha. With passive index-based investing drawing a major redirection in fund flows, active managers need to find every option they can to demonstrate their worth and outperform. By not letting “perfect” get in the way of “good”, successful firms are steadily making progress by getting a minimal viable product into the hands of the right people and doggedly pursuing refinements that will provide them with an edge.
We are in the midst of an exciting period for our industry as the next generation of solutions emerges to help us better serve the evolving needs of investors. Persistence is required to develop the skill capacity and executive understanding that will drive us forward and achieve scale beyond current levels of isolated use case adoption. Change is happening quicker than ever before. Not too long ago firms would run for the hills when the topic of hosting applications outside of their own on-premise data centers came up, and in just a few short years this point of view has taken a full 180.
The times they are a changing in our tight margin and hyper competitive asset management world. Those who thrive will willingly embrace the future and actively pursue an understanding of how to adopt emerging technology and innovation to improve what we do and how we do it.