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Approaching the end of 2023 provides an opportunity to review the last 12 months, look forward to 2024 and understand the areas SaaS providers such as Aiviq can, and do, play in supporting the sector.
An evolving landscape for asset managers
The asset and wealth management (AWM) sector, along with all in the wider financial services industry, has had to adapt to a challenging economic environment through 2023 with rising interest rates, inflation, and cost of living together with the volatility seen in digital assets, industry pressures and global political and economic uncertainty. This has been in part responsible for a decline in AUM which in turn leads to margin pressure across the industry. For active managers, declines in AUM have been exacerbated by investors switching to lower-cost passive investment products or, simply increasing their allocation to cash to profit from higher interest rates.
Looking forward to 2024, there are limited signs these underlying headwinds will ease in the immediate future, though this may change over the coming months as the complex fundamental drivers develop. For managers looking to thrive in an ongoing cost-constrained environment, the ability to deliver and execute transformation and change across business models, effectively and efficiently will be critical.
Managers will need to invest to become more client-centric and digital while simultaneously cutting operating and capital expenses. These imperatives require an ongoing focus on strategic investments in data and client experience, as well as system consolidation and outsourcing. As firms continue to accelerate their investments in digital transformation, firms will need to increase investments in technology despite challenges to their overall performance.
The larger firms will continue to scale, both organically and inorganically, utilising technology capabilities to accelerate execution and integration, whilst the mid to small-size firms will look to utilise technology as part of a wider initiative to differentiate their value propositions and increase margins. All will benefit from more efficient operations by moving away from manual processes and legacy systems to more data-driven cloud-based technology, supporting the drive to digital transformation whilst also supporting wider business optimisation through solid and robust fundamentals.
Embracing technological change through partnership
Given the complexity of such a move, partnering with third-party industry specialists can both reduce cost and significantly accelerate time to market.
As firms evolve their strategies, the delivery of technology becomes critical to how well the vision and strategy can be executed. Being able to leverage existing, innovative, and more importantly proven, product and service offerings, which can be implemented quickly, can significantly help firms drive value through speed and effectiveness.
The ability to consolidate systems across multiple use cases, incorporate new investment vehicles, provide global capabilities to reduce disjointed technology solutions geographically and deliver collaborative technology able to be leveraged across the wider organisation are core considerations.
In addition, the move to new technologies introduces new operational risks which can be a significant challenge for information security management systems (ISMS). Utilising partners with external accreditations such as ISO 27001:2013 can help mitigate change risk as firms transform across a wide range of use cases, on a global basis. Delivering this through market-leading, scalable, cloud-native technology, which is underpinned by a robust and proven ISMS, as certified annually by an independent accreditation body.
At its core, Aiviq integrates hundreds of data sources globally to automatically cleanse and match thousands of distributors, advisors, and clients. With extensive data-matching workflows, trade enrichment rules and data quality algorithms, we provide our customers with foundational datasets for full oversight of business reporting. Aiviq's Integration Hub then enables two-way data transfers with a vast ecosystem of enterprise SaaS applications to plug our distribution insights into core processes quickly.
Working alongside our active user community, our product roadmap keeps pace with rapid industry change, bringing new data integrations, product features, support for new investment vehicles such as alternatives and ETFs, as well as analytics insights, long after implementation.
Aiviq’s global vision
Our mission is to help provide our partners with the market-leading technology and innovation they need to support their digital transformation. This insulates managers from the disruptions and distractions that disparate data can cause to its operations, boosting capabilities in client insight and management information that lead to a competitive advantage in the information and data arms race that all managers are embroiled.
Customer-led product and service innovation
Through 2023 we have launched our client governance and oversight offering to centrally manage client agreements and terms, assisting with onboarding and pricing decisions through to TA oversight and rebate management. This also enables firms to calculate forecasted and actual client net revenue to improve commercial decision-making and avoid costly rebate errors.
Market feedback has been extremely positive, and we have received fantastic insights on features to prioritise next, such as AI-powered terms capture, enterprise workflow integration and distributor risk management tooling. We are excited to evolve this capability over the next 12 months.
Similarly, the final quarter of 2023 has seen our Product Managers and Engineers focusing heavily on client data matching – codifying Aiviq data expertise, integrating reference datasets and rethinking the user experience for data stewards to reduce the costs of client data and increase analytical insights. This continues to be a focus into 2024 given the focus managers are placing on cost reduction and time to value with strategic partners mentioned previously.
Finally, I have not mentioned AI so far, but I would anticipate the investment and adoption of generative AI to continue into 2024 and very likely those investments will increase. Through 2023 we have worked with our partners to understand the more valuable use cases and have hosted industry roundtables to facilitate peer-to-peer discussion.
We have shared early proof of concepts with our industry network to demonstrate the art of possible, highlighting areas where we feel there is a great opportunity, including global client data matching, semantic profiling of documents, extraction of financial terms and service obligations from agreements as well as distributor agreement analytics. However, cautious consideration of the risks and pragmatic evaluation of these new technologies based on deep domain expertise in Asset Management is needed. As our name suggests, it will be the careful balance of both AI and IQ that will provide the optimal outcome for our customers.
