Only 36 percent of the European buy side are concerned about disruption from non-traditional competitors, according to WBR Insights, the research arm of InvestOps conferences and commissions by SimCorp.
The new European Buy-Side Report assesses the current cost control struggle and operational challenges facing European asset managers and institutional investors.
InvestOps surveyed 100 buy-side heads of operations from UK, France, Germany, and the Nordics, and the report explores the asset management industry’s strategic priorities for 2018.
According to the report, 91 percent heads of operations are reducing manual processes, followed by 67 percent consolidating systems in order to bring down their firms’ cost to income ratio.
The report found that this leaves trending technologies like robotics (artificial intelligence) and cloud strategies, trailing at the bottom of the list of investment priorities.
Additionally, 81 percent of buy-side firms are overhauling legacy systems, as the top strategic priority for 2018.
The results from the report confirmed an overwhelming concern amongst asset managers and institutional investors over cost control.
The report also found that 79 percent of heads of operations’ biggest challenge is supporting front office staff with accurate data on firm-wide limits and counterpart exposure.
In comparison, the equivalent North American survey found 89 percent struggling with the provision of timely and accurate start of day data on positions and cash.
According to the report, the issues raised on both sides of the pond are symptomatic of outdated systems, causing data gaps and fragmentation.
In terms of asset classes in Europe, private debt (59 percent) and alternatives (51 percent) reigned among the most costly and challenging asset classes to manage.
Meanwhile, the report found, private equity, infrastructure, and hedge funds were the most popular alternatives amongst European firms.
Stephen Butcher, senior vice president and managing director, UK, the Middle East, and Ireland, SimCorp, said: “The report makes it clear that the current status quo in investment operations needs to change fast. In today’s margin-pressured environment, buy-side firms must reduce their operating costs to compete effectively.”
Butcher added: “Cutting through the complexity and consolidating investment data is key to this goal. Simplifying operations in this way will not only reduce a firm's costs and risks, but more importantly will deliver the innovation that is vital in the search for returns and competitive edge.”
