In the world of asset management, digital transformation is not just a buzzword – it’s a fundamental shift that is reshaping the industry. As we delve deeper into this era of technological evolution, understanding how digitalisation is influencing asset management is crucial for staying ahead of the curve. This article explores the future of fund management through the lens of technology, highlighting industry statistics and focusing on how fundcraft is at the forefront of this digital revolution.
The Current Landscape of Asset Management
Asset management has traditionally been characterised by manual or batch processes, extensive paperwork, and a reliance on face-to-face interactions. However, the tide is turning and a significant shift is taking place from a people-centric approach to a digital-first mindset being propelled by advances in technology. According to a PwC report, the asset and wealth management industry is expected to experience significant growth, reaching $145.4 trillion in AUM by 2025. This growth coincides with increasing digital adoption, where AI, machine learning, and big data analytics are becoming central to fund operations.
The Digital Shift: From Tradition to Innovation
Digital transformation in asset management involves adopting and integrating advanced technologies to streamline operations, reduce business risk, enhance quality of decision-making, and improve all stakeholder and client experiences.
Key areas of transformation include:
- Automation of back-office operations:Reducing manual workload and increasing efficiency – an asset management company typically handles large volumes of data and workflow processes that are ripe for automation. According to Gartner’s Financial Technology Survey, 70% of wealth and asset management firms say they’ve deployed or are experimenting with automation, and 85% are planning to increase their use of automation in the next two years.
- AI and machine learning: AI’s capability to process vast amounts of data at unprecedented speeds allows for more sophisticated risk assessment, market trend analysis, and predictive insights. This, in turn, leads to better-informed investment strategies and enhanced risk management. Machine Learning algorithms, with their ability to learn from data, continually improve and refine these processes over time, leading to increased efficiency and accuracy.
- Big data analytics: Advanced analytics tools provide deep insights into market trends, investor behaviour, and economic indicators, enabling asset managers to make more predictive and strategic investment decisions. This data-driven approach facilitates a more nuanced understanding of risk and return, allowing for the optimisation of portfolios in alignment with evolving market conditions.
fundcraft’s Role in Pioneering Digital Transformation
fundcraft is a trailblazer in digitising asset management for alternative investment funds. Our digital infrastructure for asset managers caters to private equity, venture capital, and funds of funds, centralising all back-office operations and stakeholder interactions on a single, unified platform – the fundcraft approach is digital first.
Key innovations by fundcraft include:
- Digital proprietary platform:fundcraft’s platform is a cross-functional single source of truth, centralising all data and processes from across the entire ecosystem of asset servicers and operators, i.e. clients, lawyers, banks, auditors, etc.
- Multi-user, self service platform: fundcraft is accessible by all of the stakeholders in the investment lifecycle, enabling asynchronous working, delivering increased efficiencies and total transparency.
- Streamlining end to end processes: Full automation of typical processes such as capital call process, end to end distribution process of closed funds, subscription process for open ended funds, etc., with seamless integration to banking and back end systems.
- Solutions tailored to the operational complexities of private equity, venture capital and funds of funds:fundcraft enables managers to focus on their core business of fundraising and investing without being bogged down by administrative tasks.
The impact of digital transformation in asset management is profound:
- Increased efficiency: Automation and use of digital technologies reducing time spent on administrative tasks whilst also reducing the risk of human error, providing fund managers peace of mind and enabling them to focus on their core business activities and client relationships. fundcraft has been able to reduce operational costs by up to 50% whilst improving efficiency and performance by 30%.
- Enhanced decision making: Access to trusted, real-time data, dashboards and analytics tools enabling fund managers to make more informed, smarter investment decisions.
- Improved investor experience: Digital platforms offering investors transparency, improved accessibility, and personalised services.
The digital transformation in asset management marks a new era of efficiency, transparency, and innovation. As a leader in this field, fundcraft is not just at the forefront of these changes but is revolutionising the future of fund management. By embracing digital technologies, asset managers can unlock new potentials and navigate the complexities of the modern financial landscape with greater ease and confidence.