PwC questions asset managers’ response to tech fears

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Almost two-thirds of asset management chief executives see the speed of technological change as a threat to their business, according to PwC’s latest global survey.

As 85 per cent of respondents to the consultancy’s 19th Annual Global CEO Survey are examining how they use technology to “improve stakeholder experience”, 64 per cent see an opportunity to better engage with customers by using data and analytics.

Gathering the responses from 189 chief executives at fund groups in 39 countries, 90 per cent say they are “confident” or “very confident” about revenue growth for the year ahead, with that figure rising to 95 per cent looking out three years.

But shifting customer behaviours, cybersecurity and stock market volatility were all cited as potential threats to business growth.

UK asset and wealth management leader at the group Mark Pugh questions whether they are taking such threats seriously enough.

He says: “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 cybersecurity, disruptive technology and changing consumer demands and expectations?”

The survey reveals just 30 per cent of asset management chiefs expect the global economy to improve over the next 12 months, while 25 per cent expect it to decline.

Concerns also exist around over-regulation, geopolitical tension, volatile exchange rates and interest rate rises as possibly hampering growth.

Defining their success over the next five years, the chief executives say “responsibility” will play an important role.

Most respondents, or 86 per cent, say they will prioritise long-term over short-term profitability, while 69 per cent intend to report on both financial and non-financial matters.

Similarly, 68 per cent anticipate corporate responsibility will sit at the heart of their operations.