The last 3 years have seen a big shift in attitude towards “digital transformation” across the investment industry. The range of this change has been broad, and firms of all sizes across mutual funds/ETFs, private client management and specialist investment boutiques have all invested, to some extent, in digital. For the smaller firms, this has simply been about building a better website. For other firms, “digital” has meant something far more substantial. These firms have used “digital” to transform their businesses: the way they work, the way they sell, and the way they communicate.

The change is well underway; many other firms across asset and wealth management are now adopting “digital” to truly transform their business model. To date, much of the focus – and investment –  has been directed towards the retail space, serving the informational needs of advisors and direct investors so that the “shop window” is well presented and provides good quality product information and industry insights. To a large extent, this has now become the bare minimum that every firm (large or small) needs to have simply to be in business.

We are now seeing signs of the next phase of “digital” in our industry. Our customers are thinking more deeply about their own businesses, their niche in the market place, and what value they can achieve by adopting digital platforms such as Kurtosys.

Take, for example, institutional asset management. The segment has largely remained untouched from a digital perspective by asset managers, bar simple web pages describing their products. The bare minimum was deemed the norm, but this collective thought is changing more quickly than we imagine. The institutional space is where the big money is. Scale matters in an industry where margins are taking a hit. Asset gathering through institutional mandates and the retention of institutional mandates is now the topic of digital conversations.

There are reasons for this. For one, product choice is getting more competitive. Secondly, investment consultants are developing their role in helping allocators create and manage portfolios. More money is now finding itself in pension funds as savings are set to increase for the first time in decades and, finally, the concept of savings is no longer a middle-aged matter. The smart money says that institutional asset management is going to grow significantly over the next 5 years. So what?

We are seeing many of our customers fine-tuning their investments in digital strategies to best serve the institutional space. For fund distributors, this has meant investment in sales tools that help teams provide deeper, richer and more dynamic portfolio solution tools. These tools create branded portfolio illustrations and provide investment solutions (based on specific criteria) for narrow and quality rationale for portfolio selection.

By providing digital tools for this, sales and relationship teams can scale far more quickly whilst maintaining personal relationships. For fund manufacturers, there is a need to furnish investment consultants, wholesalers and the end asset allocator with privileged product information, but also tools to monitor markets and trends, access thought leadership and understand their specific investment differentiators and associated strengths. Market forces have meant that firms need to react quicker to institutional investors. RFPs need to be completed in a more consistent, automated way.

How does digital help? Well, we think that sales, marketing and client service teams will increasingly work more closely together, and one day soon they will merge from an organizational standpoint. The asset management industry – where the life cycle of client management extends many years – has a strong case for combining the disciplines of sales, marketing and client servicing into one. This synergy is significant, but more importantly it will reap rewards through asset growth and retention, especially in institutional asset management. Sales teams need marketers to provide flexible “Sales Portals” with unencumbered access to all sales material, with relevance to their client constituency and to remain the constant backup for sales teams by running relevant and timely nurturing campaigns. Client service teams also need to be able to offer client portals to ease the burden of report distribution and information dissemination.

We believe the change in institutional asset management from a sales, marketing and client service perspective will be profound. Asset managers who subscribe to building a business around institutional distribution will need to start taking digital seriously – it’s a sure-fire way to help them display their proposition in the most effective way.

Mash Patel
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Mash Patel

Founder & CEO at Kurtosys Systems
Mash Patel is CEO of Kurtosys and founded the online experience platform in 2002 with a view to create a digital vision for the financial services industry through the lens of a platform built for all. Mash has over 15 years experience working in the financial services sector across a diverse range of roles, including consultancy, marketing and technology and has worked at companies such as Merrill Lynch, Societe Generale and Coopers & Lybrand where he was responsible for overseeing strategic technology on projects in over 30 countries.

He is a non-executive board member of a number of Fintech startups and takes a broad interest in how innovative technology is shaping the future of financial services.

Mash holds a degree in Mathematics and Computer Science from the University of Warwick and a Masters in Finance from London Business School. Away from Kurtosys, Mash is most likely to be found with his family and dog, Bode, or indulging his passion for soccer, supporting Arsenal F.C.
Mash Patel
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