Cooper Wood & Associates reveal key focus of asset servicing survey results
11 January 2021 UK
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Environmental, social, and governance (ESG), working from home, cost management, market optimism and cost of compliance were the key focus of Cooper Wood & Associates’ 60 Second Asset Servicing Survey.
The survey, which was conducted last month, aimed to gauge the industry with a quick litmus test on a number of broad themes.
It shows that reviewing existing service providers (36 per cent) will be the main focus for 2021 when it comes to cost management.
Also high on the cost management agenda, was reduction in staff headcount (24 per cent), increased automation (17 per cent), and rationalisation of existing product (6 per cent).
Respectively, some 5 per cent noted outsourcing/offshoring, wage reduction as an area most likely to receive focus in 2021. Areas with the least amount of focus included office relocation (4 per cent) and mergers and acquisitions activity (3 per cent).
Rod Cooper, partner of the independent consultancy, says he expected there to be a concern about headcount reductions in 2021 especially as many firms said there would not be any in 2020 due to COVID-19.
But headcount pressures did not disappear, so 2021 “will almost certainly be a tough year”, according to Cooper.
Respondents were also asked in view of the pressure on fees in recent years, what the likely pressure on fees be in 2021. Almost half of the respondents (46 per cent) said “higher”, while some 37 per cent said “medium” and 17 per cent said “lower”.
Meanwhile, 57 per cent named ESG and socially responsible investing (SRI) as the sectors they think UK investors will most likely be focussing on in 2021.
After ESG and SRI, 28 per cent predicted technology would be an area of focus in 2021 for UK investors.
Cooper notes that the industry challenge will be to satisfy investor appetite for SRI/ESG product, while simultaneously ensuring compliance with it.
The survey also looked at compliance, 42 per cent of those asked said operational resilience would be a main compliance focus area, while some 21 per cent cited remote working risks.
Meanwhile, respondents also listed ESG and SRI compliance (17 per cent), value assessment (15 per cent), and the investment firms prudential regime (5 per cent) as a focus area.
Tim Wood, partner of the independent consultancy, explains there was “a great response” to the survey.
“It is clear that some trends are emerging in terms of the move to ESG investments, increased technology, remote working, and market optimism,” Woods says.
“Time will tell if the anticipated ‘new normal’ of remote working will fall into the sights of financial institutions seeking to respond to another of the survey results, that of increased cost cutting, wage reductions, and fee pressure.”
The survey, which was conducted last month, aimed to gauge the industry with a quick litmus test on a number of broad themes.
It shows that reviewing existing service providers (36 per cent) will be the main focus for 2021 when it comes to cost management.
Also high on the cost management agenda, was reduction in staff headcount (24 per cent), increased automation (17 per cent), and rationalisation of existing product (6 per cent).
Respectively, some 5 per cent noted outsourcing/offshoring, wage reduction as an area most likely to receive focus in 2021. Areas with the least amount of focus included office relocation (4 per cent) and mergers and acquisitions activity (3 per cent).
Rod Cooper, partner of the independent consultancy, says he expected there to be a concern about headcount reductions in 2021 especially as many firms said there would not be any in 2020 due to COVID-19.
But headcount pressures did not disappear, so 2021 “will almost certainly be a tough year”, according to Cooper.
Respondents were also asked in view of the pressure on fees in recent years, what the likely pressure on fees be in 2021. Almost half of the respondents (46 per cent) said “higher”, while some 37 per cent said “medium” and 17 per cent said “lower”.
Meanwhile, 57 per cent named ESG and socially responsible investing (SRI) as the sectors they think UK investors will most likely be focussing on in 2021.
After ESG and SRI, 28 per cent predicted technology would be an area of focus in 2021 for UK investors.
Cooper notes that the industry challenge will be to satisfy investor appetite for SRI/ESG product, while simultaneously ensuring compliance with it.
The survey also looked at compliance, 42 per cent of those asked said operational resilience would be a main compliance focus area, while some 21 per cent cited remote working risks.
Meanwhile, respondents also listed ESG and SRI compliance (17 per cent), value assessment (15 per cent), and the investment firms prudential regime (5 per cent) as a focus area.
Tim Wood, partner of the independent consultancy, explains there was “a great response” to the survey.
“It is clear that some trends are emerging in terms of the move to ESG investments, increased technology, remote working, and market optimism,” Woods says.
“Time will tell if the anticipated ‘new normal’ of remote working will fall into the sights of financial institutions seeking to respond to another of the survey results, that of increased cost cutting, wage reductions, and fee pressure.”
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