Northern Trust survey: asset managers take a closer look at new ways of operating to create efficiencies and control costs

CHICAGO–(BUSINESS WIRE)–Investment managers are most concerned about creating efficiencies in their operations over the next two years, followed closely by a focus on cost and improving quality and accuracy , according to a survey of 300 global asset management firms sponsored by Northern Trust.

Northern Trust today published a white paper, The next chapter of Driving asset management growth, which offers insight into how asset managers can create greater efficiency and control costs by leveraging technology and outsourcing functions that may not be core to their investment process and by viewing operations through the lens of their entire office, front to back, including investment decision support activities and data management.

“As we emerge from a two-year pandemic in which operating models have been strained or challenged, there has been a renewed focus on efficiency and how talent and technology can enable that,” said Ryan Burns, Head of Global Fund Services (GFS), North America. “The most successful asset managers are taking advantage of new technologies and operational approaches, while seizing the benefits of outsourcing, to enable more effective and efficient decision-making.”

The survey, conducted for Northern Trust by WBR Insights, shows that asset managers are grappling with some of the same issues identified in a 2020 survey, as the global pandemic prompts many to take a closer look at the outsourcing as a solution.

While 50% of respondents said their top strategic priority for the next two years would be to create greater efficiency, almost as many (47%) also plan to focus on cost control and 45% said the Improving quality and accuracy was a top priority.

The new way of working in the wake of the global pandemic has influenced investment managers’ views on outsourcing. In particular, respondents said the remote work environment (60%), the cost of maintaining in-house capabilities (52%), and staffing issues (51%) increased their likelihood of outsourcing.

“Managers are faced with many challenges: staff turnover, return of staff to offices, cost management”, explains Caroline Higgins, responsible for Hong Kong, Macao and Taiwan. “With so many questions to answer, the way forward is to look at them holistically, covering people, technology, services and regulations. Our customers are proactively thinking about how to streamline their operations, and they have turned to outsourced providers like Northern Trust who can help them leverage technology to meet their business goals.

Data management is seen as the area with the greatest potential for outsourcing, with almost half (48%) of respondents planning to outsource data management in the next two years. Around a third are considering outsourcing foreign exchange, securities finance and middle office functions, and one in 10 say supporting the growth of crypto/digital assets is a priority, according to the survey.

“Today’s asset managers want flexibility to choose the best partners for their investment processes,” says Clive Bellows, Head of GFS EMEA. “For example, they want to be able to select a trading solution, currency provider or data management capability that fits their way of working. This option can support decisions that ultimately help generate alpha. »

The white paper The next chapter in asset management growth can be viewed here.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking services to businesses, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 US states and Washington, DC, and 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2022, Northern Trust had assets under custody/administration of US$13.7 trillion and assets under management of US$1.3 trillion. For more than 130 years, Northern Trust has distinguished itself as an industry leader for its exceptional service, financial expertise, integrity and innovation. Please visit our website or follow us on Twitter.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 USA, incorporated with limited liability in the USA Please read our global and regulatory information.