Harnessing disruption: How the asset management industry is leveraging technology, data, and innovation

The accelerating use of technology in asset management is changing the industry from the inside out, and this transformation is occurring as asset managers also contend with political, economic, social, and environmental factors that are percolating across the entire value chain.

How is technology impacting the asset management industry today, and what changes do industry participants see on the horizon? These questions were discussed by participants at the 2018 KPMG Asset Management Forum, which included a panel on the potential of the asset management industry to harness the disruption posed by technology, data, and innovation, featuring Mark Leide, Director and Lead Architect, RBC Investor & Treasury Services, IT.

“We can't imagine today what's possible tomorrow"

All panelists agreed that technology is being woven into every aspect of the asset management business. New technologies and innovations, from blockchain to big data, robotics and artificial intelligence, are changing the asset management landscape in the areas of regulation, customer experience, cyber, as well as operating models. Technology now “has a role at the crux of everything," panelists commented, from client experience to the development of new products and services.

But the industry is not simply incorporating new technology while remaining essentially unchanged. Instead, technology is fundamentally altering the industry in ways that panelists say may not even be recognized yet. Just as the implications of new technologies such as blockchain, for example, were unimaginable a few years ago, many of the changes that will arrive in the coming decade are similarly inconceivable today.

Given the scale and pace of change, the asset management sector needs to adopt a “change mindset." Only by developing a comfort with and appetite for change can the industry as a whole respond to challenges, and adopt new ways of functioning that will allow it to incorporate the immense potential of exponential technologies.

“Avoid the pitfall of solutioning before the problem is defined"

While technology is “changing everything we do," it is nevertheless critical to take the time to deeply understand your existing processes, their functions and benefits before “throwing robotics at your problems," commented Leide. “Chances are your processes look and feel the way they do for compelling reasons. But it is important to revisit and assess the foundations of your existing processes before adopting changes to ensure that new approaches are truly adding value."

Technology is being
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“Today, some segments of the workforce demand new technologies before the fit has been defined," Leide added. “There's a tremendous pull to jump to the solution, and to pre-define the solution as robotics, essentially 'solutioning' before identifying the problem." Instead, organizations should consider going slowly and building the soft skills required to complement the use of technology in the workplace.

This sentiment was shared across the panel. While the asset management industry may require specific technical skills, the importance of a “change mindset" may be equally relevant, panelists noted. “Do people have the ability, and the willingness, to try and master the challenges they are facing? If not, can they be taught, and if yes, can they teach others?" asked Leide.

Panelists noted that there was a time when “creative accounting" was frowned upon. Much has changed, one said: “Today, we are actually looking for creative accountants, employees who will not settle for the status quo, and who will bring a creative mindset to analytical problems."

Counteracting the cultural fear of robots

Revisit and assess the foundations of your existing processes before adopting changes to ensure that new approaches are truly adding value

The “fear of robots" has become a cultural issue in the workplace. In order to counteract this, leaders should position technology as a way to “take work off employees' plates," rather than taking jobs out of their hands. Technology solutions should be positioned and pursued as solving process inefficiencies, and freeing up employees to take on more challenging and creative work.

Many people working in asset management today are concerned that technology will reduce the number of workers required in the industry, “but I expect there will be more jobs in asset management going forward rather than less," commented Leide.

Making space for doers, changers, and dreamers

Panelists discussed the ways in which different segments of the workforce across the asset management industry can be engaged with, and respond to, the innovations transforming the industry:

•  The majority of workers, perhaps 70 to 75 percent of the workforce, are “doers," a segment that is comfortable implementing solutions presented to them but may fare less well when faced with the initial changes
• “Changers," in contrast, which may represent the next 20 to 25 percent of the workforce, are a segment that will most enthusiastically pick up the changes wrought by technology in the workplace and the asset management industry overall, and are ready to lead
• Finally, “dreamers," who occupy just five percent of the workforce, will envision the changes that will ultimately be adopted and implemented by the remaining two segments

Technology solutions should be positioned and pursued as solving process inefficiencies, and freeing up employees to take on more challenging and creative work

For an organization to be functioning effectively in the face of continuous waves of technological change, the needs and strengths of all three segments must be engaged. Only by harnessing the full potential of today's and tomorrow's workforce can the asset management industry thrive in the face of the wholesale transformation it is facing.

Taking a long view, recruiting for soft skills as well as technical expertise, and creating opportunities for all segments of the workforce can help.

In examining the challenges of disruptive technologies, panelists at the KPMG Asset Management Forum reached many of the same conclusions: deep operational understanding, a long view, and a “change mindset" are all required for successful implementation of new technologies and robotics throughout the industry. Together, these factors will help the asset management industry of today to keep transforming into the asset management industry of tomorrow.