Increased Regulation Represents Top Challenge Facing Canadian Asset Managers: RBC Investor & Treasury Services Poll

September 19, 2018

Proliferation of data also presents concerns

TORONTO, Ontario – September 19, 2018 – Canadian asset managers are not immune to the evolving changes impacting the financial services sector, according to a recent national poll by RBC Investor & Treasury Services. While increased regulation remains the top challenge, an overwhelming number of the 82 respondents also believe that proper data management can benefit their firm and 94 per cent are confident they can adapt to the changing environment.

Managers selected increased regulation as their top near-term challenge, garnering 16 per cent of choices. Greater transparency requirements, enhanced protection for investors, as well as additional oversight for the asset management sector are potential reasons behind the focus on regulation. Increased regulatory obligations have also created a heightened sense of awareness of reputational risk among managers.

Managers are addressing these challenges with a back-to-basics approach by:

  • Enhancing their service offering (22 per cent)
  • Improving efficiencies (22 per cent)

Regulations requiring asset managers to disclose details of their costs to end investors may be a factor in the increased attention around improved efficiency, while a more efficient operation can also allow managers to invest in an enhanced service offering.

MAKING SENSE OF THE DATA

Ninety-five per cent of respondents indicated that data can benefit their firm, enabling them to:

  • Make more informed investment decisions (32 per cent)
  • Better anticipate client needs (27 per cent)

However, the timeframe to accomplish these benefits is unclear since data analytics ranks a distant third on the list of technology priorities over the next 12 months. Enhancing service offerings through enhanced client relationship management systems and increasing efficiency through process automation were reported to be consuming near-term technology budgets.

ADDITIONAL FINDINGS

  • Forty-five per cent of managers are not planning to introduce new products in the next year
  • Managers who are planning product launches will focus on ETFs (21 per cent)
  • Ninety-two per cent of asset managers at firms with more than $5 billion assets under administration (AUA) responded that Environmental Social and Governance (ESG) was important, versus 44 per cent at smaller firms with under $1 billion AUA
  • Asset managers believe their clients most value client service (37 per cent) and high returns (23 per cent) from them

QUOTE

“With the business environment continuing to evolve, managers must ensure they remain competitive while addressing continued regulatory shifts. We believe that asset managers today are looking for more than commoditized custody services. They are looking for a true partner that understands the benefits of new technology and can successfully apply it to provide rapid access to meaningful data that helps them with their business decisions. It is particularly pleasing that the poll results support the investments we are making in our business, particularly with regards to data, technology, enhanced product capabilities and focused regulatory expertise.”

  • David Linds, Managing Director and Head of Asset Servicing Canada, RBC Investor & Treasury Services

About the RBC Investor & Treasury Services Canadian Asset Manager Poll

RBC Investor & Treasury Services conducted an online poll of Canadian asset managers in the second quarter of 2018. The results represent the aggregate responses from 82 managers across Canada.

About RBC Investor & Treasury Services
RBC Investor & Treasury Services (RBC I&TS) is a specialist provider of asset services, custody, payments and treasury services for financial and other institutional investors worldwide, with over 4,000 employees in 17 countries across North America, Europe, Asia and Australia. We deliver services which safeguard client assets, underpinned by client-centric digital solutions which continue to be enhanced and evolved in line with our clients’ changing needs. Trusted with CAD 4.2 trillion in client assets under administration as at August 22, 2018), RBC I&TS has been rated by our clients as the #1 global custodian for eight consecutive years and is a financially strong partner with among the highest credit ratings globally.

For more information, please contact:
Briana D’Archi 
+1 416 955 5658
briana.darchi@rbc.com