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Results of a new survey reveal that operational and technological change is high on the list of priorities for investment management firms. The report, which is being launched at the TSAM New York conference taking place today, reveals that over half (56%) of respondents expect their firm to replace at least part of their existing technology platform, while a quarter (27%) plan to outsource some areas of operation in the next 12 months in a bid to improve efficiency and focus on core operations.

Efficiency improvements were the most commonly cited reason for undertaking technology upgrades, identified by 88% of those firms looking to replace their technology. It was followed by greater agility (61%) and supporting business growth (56%). The biggest driver for organizational change is regulation (42%), ahead of client demands (14%), cost reduction (12%) and entry into new product areas (11%). The majority (56%) of respondents view technological disruption as an opportunity versus 22% that said it was a threat.

"The asset management industry is on the cusp of radical change as firms look to improve efficiency and adapt to the new competitive and regulatory environment," said Jonathan Wiser, Director at Osney Media, which commissioned the study and organizes TSAM New York. "With so much focus and attention devoted to the influence technological disruption could have on the financial services industry, it's interesting that regulation remains the number one reason for effecting organizational change."

With so many legacy technology system replacements anticipated in the next 12 months it is unsurprising that the majority (57%) of respondents claim their expenditure on technology will increase. The study also reveals that, despite the focus on efficiency, fewer than half of firms (46%) have formal metrics in place to measure operational efficiency gains.

Bill Haynes, CEO and founder of BackBay Communications, the marketing and communications consultancy that conducted the research, said: "These transformational projects often require a massive commitment both financially and in terms of effort, taking multiple years to complete. Despite having very clear goals, any company looking to embark on such a project can't expect to see results overnight. Communicating the goals, both with internal and external stakeholders, as well as setting and measuring its progress, is crucial to the success of any implementation."

 

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