Generational change
Our industry is also going through generational changes. Our workforce and clients are evolving into a more demanding, just-in-time culture. All participants have more technical ability and are more demanding for deeper and faster access to information. Given the clients’ increasing appetite for digital communication, inbound data becomes a critical function for product development, marketing, and sales. This requires a mature data management function that supports high quality mastering combined with a robust analytics infrastructure.
Transformed corporate cultures and operating models
After two years of the pandemic restrictions, corporate culture and operating models will be different going forward. There will be more support for a hybrid work model supplemented with more advanced collaboration tools for virtual workspaces. At the same time, the labor market has become increasingly competitive and volatile, adding more pressure to operating margins due to increases in staff acquisition costs, compensation, and benefits. It is unclear if this is a short- or long-term change.
ESG’s impact
Regulatory agencies and asset owners continue to push for more ESG disclosures. Younger investors and younger potential employees are asking hard questions. They want to ensure that the asset management firm they’re investing with is investing responsibly, while younger employee candidates want assurance that the asset management firm they work for is a good corporate steward. Watch for asset managers to continue building out their ESG strategies from the top down, including implementing new ESG-related datasets and frameworks to evaluate both investee companies as well as third-party suppliers. Asset managers and asset owners also will go deeper in incorporating diversity, equity, and inclusion (DEI) efforts into their organizations.
Although the headwinds continue to build in asset management, today’s firms remain committed to advancing and progressing. As the industry’s work environment and corporate culture transform, we at Cutter remain committed to helping asset managers reach operational efficiency and support alpha generation responsibly.