Global asset management CEOs confident about revenue growth

While only 30% of global asset management chief executives expect the global economy to improve over the next 12 months, a massive 90% describe themselves as ‘confident’ or ‘very confident’ about revenue growth in 2016, with that figure rising to 95% within the next three years.

The PWC Annual global CEO Survey of 189 asset management chief executives in 39 countries revealed that 25% do expect the global economy to decline over the course of this year.

However, this does not appear to dent the confidence they have in the revenue growth they predict in their companies over the next one-to-three years.

Barry Benjamin, global asset and wealth management leader at PWC, reported that ‘Asset management is going through a time of fundamental change. This is a great time of opportunity for growth, yet asset managers need to become more innovative, leverage technology, manage a wider range of risks and use digital communication intelligently if they are to remain competitive.

‘In ten years’ time the sector is likely to become far bigger, but asset management companies will look very different from today.’

In addition to the global economy, over-regulation, geopolitical uncertainty, unpredictable exchange rates and interest rate rises are also perceived as threats to growth. 61% of CEOs surveyed see ‘shifting customer behaviours’ as a hazard, 60% regard cyber security as a further danger, and another 61% expressed concern over stock market volatility.

Mark Pugh, the UK asset and wealth management leader at PwC, said: ‘Asset managers are on the right side of a number of powerful trends. Retirement patterns across the globe, especially in the UK with recent Pension Freedom reforms, are leading to opportunities as well as creating a wider set of stakeholders.

However, there are grounds for wondering whether asset managers worry enough about some of these hazards. Are they anxious enough about cyber security, disruptive technology and changing consumer demands and expectations?’

With regard to technology, asset management chief executives are aligned with the wider CEO community and share concerns about the rapid speed of technological change.

• 61% consider the actual speed of technological change as a threat
• 85% are currently examining how their own technology can be used to improve stakeholder experience.
• 64% believe that data and analytics are the most effective means for engaging customers.
• 58% are prioritising strategic alliances and joint ventures.

Pugh also observed that ‘As asset managers seek to fill product gaps and make the most of the opportunity to move centre stage in finance’s ecosystem, CEOS are aware that they need to keep on top of the latest technological developments.

For some, this means they are exploring the opportunity to keep track of, and potentially partner with, start-up and FinTech companies who have already built up strong expertise in this area.

With over half of global asset management CEOs already prioritising strategic alliances, the other half of the industry can ill afford to get left behind.

‘The ongoing possibilities being opened up utilising and analysing data will be transformational for the asset management industry,’ he said.

‘CEOs are aware that they need to keep on top of the latest technological developments’.


More News & Insights