Half of asset managers to rely on cloud and AI for post-pandemic recovery, survey finds

Temenos study found that 56% of asset managers will focus investment on technology and data infrastructure in the next year.

By Joe Parsons

Half of asset managers plan to focus their investment on technology and data infrastructure to drive their post-pandemic recovery, a report by Funds Europe and Temenos has found.

Of those surveyed, 56% said these areas will be the focus of their investment over the next year while 47% said they will focus on ensuring compliance with environmental social and corporate governance (ESG).

The survey found that during the pandemic buy-side firms had been forced to review their IT strategies and consider a transition to the cloud, finding that 62% of respondents said cloud-native solutions would play a major role in the next year, as well as, Software-as-a-Service solutions and the use of open application program interface technology.

Respondents said artificial intelligence would be used most heavily in portfolio analytics and performance measurement, data sourcing, cleansing and enrichment, and improving the operational efficiency of middle- and back-office processes.

“In mapping out the road to recovery, asset servicing firms and fund managers are increasingly looking to take advantage of the tools, analytics and scalability of the cloud,” said Barry Lee, business solutions director, Temenos Multifonds.

“Temenos’ SaaS-based Explainable AI (XAI), for example, enables our fund administrator clients to use AI to reduce manual interventions, detect potential breakdowns in workflow, and speed up exception management related to price movements. This future-proofs their operations against black-swan events and increases overall efficiency and productivity.”

Asset managers are increasingly turning to new technology in a post-pandemic landscape to drive their operational resiliency.

According to a recent study by BNY Mellon, 96% of respondents claimed to be leveraging cloud-based infrastructure to provide building blocks for the development of digital services and products.

In addition, over three quarters of survey market participants ranked machine learning and artificial intelligence as a digital imperative to focus on in the next three years.