The landscape of finance and asset management is becoming increasingly digital. Many asset management firms still look at FinTech organizations as disruptive to the financial markets and a source of new competition.
While FinTech has caused significant disruption within the financial industry, asset management firms can greatly benefit from this disruption when FinTech providers are seen as collaborators rather than competitors. Many FinTech companies strive not to overpower traditional institutions but to offer digital support – giving firms that embrace FinTech valuable advantages.
In this article, we discuss the evolving relationship between asset management firms and FinTech organizations. Keep reading to learn how partnering with FinTech can provide your own institution with the competitive edge it needs to thrive in an increasingly digital industry.
Collaborating with FinTech Helps Asset Managers Create Value for Clients
Investments in FinTech worldwide have increased dramatically over the past decade. According to data from Statista, global investments into FinTech companies have grown from just $6 billion (USD) in 2011 to more than $210 billion in 2021.
As the popularity of FinTech continues to grow, so do the digital expectations of financial consumers. In turn, financial institutions – and asset management firms in particular – need to be looking for innovative ways to create digital value for their clients.
There are two ways to go about this. Either:
- Asset management firms can invest in and implement new technologies independently, meaning they will need to find and onboard new talent for such tasks.
- Asset management firms can partner with FinTech organizations who offer a variety of technological and staffing resources for both temporary and ongoing support.
Not only will these FinTech partnerships allow for lower upfront investment costs, but they will also enable firms to deploy new technologies and strategies with far greater speed and efficiency.
As a result, asset managers can provide their clients with services that meet heightened digital expectations much sooner.
The Competitive Advantage of FinTech Collaborations
For asset management firms, credit unions, and any other financial institution considering a collaboration with FinTech, the time is now. Gaining the benefits FinTech partnerships have to offer is not only essential for staying highly competitive but also for staying relevant and trusted in the eyes of consumers.
Here are 3 key advantages of FinTech collaborations for asset management firms and credit unions:
1. New and Effective Technology
Technology is sweeping the asset management industry, reshaping the way such institutions do business.
In 2020, BDO released its Financial Services Digital Transformation Survey of 100 C-suite executives belonging to asset management organizations. This survey uncovered key findings regarding the types of technologies asset management executives are already deploying, including:
- Cloud Computing (72%)
- Advanced Analytics (56%)
- Internet of Things (48%)
- Artificial Intelligence (44%)
- Blockchain (33%)
Additionally, the survey also found that change management and optimizing business processes were the top two digital priorities of asset management firms in 2020.
To stay competitive amidst this increase in technological adoption, asset managers must consider how to implement and deploy emerging technologies effectively.
FinTech partnerships offer a unique opportunity to access such technologies with lower upfront investment costs. Through partnerships with FinTech providers, asset management firms can gain immediate access not only to the technologies they need but also to specialized experts who understand the complexities of implementing new digital tools and strategies in finance.
2. Staff Augmentation
Staff augmentation is a service that provides talented and specialized experts for a wide variety of projects and tasks.
By utilizing staff augmentation, asset management firms can cast aside the need to scout and onboard new staff members. Instead, they can consult with their chosen FinTech partner about the scope and needs of any new digital projects. The FinTech partner will then provide the best team of professionals to the firm, allowing the firm to leverage these professionals as needed.
In addition to having on-demand access to FinTech specialists, staff augmentation also helps asset managers to scale their business up or down as needed. Unlike traditional staffing models, staff augmentation does not require an institution to make any long-term commitments to new team members.
3. Access to Younger Generations
Generation Z is quickly coming into adulthood – meaning there is a whole new pool of consumers for asset managers and other financial institutions to focus on.
According to a 2022 article from the Wall Street Journal:
“ – Gen Z grew up immersed in that technology—and they won’t be attracted by ease and novelty the way earlier generations were. They don’t want products that are designed for masses of users. Instead, they are looking for highly personalized experiences.”
To attract Gen Z, firms need FinTech partners who understand the nuances of Gen Z’s digital preferences and can develop services and solutions that build loyalty and trust amongst this younger generation.
Final Thoughts: CPQi has the FinTech Services Asset Managers Need
At CPQi, our FinTech experts are dually trained in both finance and technology, allowing them to understand even the most complex challenges asset managers face. Plus, our staff is committed to continued learning, keeping up to date on the latest trends and emerging technologies in the industry.
Along with offering staff and resource augmentation, CPQi can provide your firm with a full range of digital and transformational services – from predictive technology and omnichannel banking to cloud computing and platform managed services.
Gain the competitive edge of a FinTech collaboration by partnering with CPQi. Get in touch with our expert team today to learn more about how we can support your asset management firm.