A quarter of senior asset management executives worldwide believe it’s highly likely they’ll face direct competition from a non-traditional new entrant, such as a technology or non-financial services company, within the next five years, finds a State Street Corporation report.
The survey of 400 senior asset management executives also finds another 54% believe this threat is somewhat likely.
Read: 2015 Top 40 Money Managers Report: Some pension funds turn to risky insurance products
Against this backdrop, 42% of money managers are preparing to enter a new product category for the first time, 52% are planning to expand their distribution networks and 48% are tapping new distribution channels.
“As new entrants eye the sector, success will increasingly depend on technology and data analytics to address the growing demands of clients for more personalized and sophisticated information and investment solutions,” says Jane Mancini, senior vice president and head of asset manager sector solutions at State Street.
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Here are some additional findings from the survey.
• 70% of respondents say they have to rethink their business approach around demand for multi-asset strategies;
• 64% say increased risk and compliance demands threaten to divert resources from the critical business areas;
• 96% say they’re under pressure to reduce costs;
• 77% now offer clients more transparency on risk and return compared to a year ago;
• 61% say clients are demanding a more personalized approach to help them understand their risks compared to a year ago; and
• 72% say their conversations with clients has evolved to focus more heavily on risk compared to a year ago.
Read: 2014 Top 40 Money Managers Report: Pension funds face risk head-on