RBC: Increased regulation top challenge for Canadian asset managers
19 September 2018 Toronto
Image: Shutterstock
Canadian asset managers are not immune to the evolving changes impacting the financial services sector, according to a recent national poll by RBC Investor & Treasury Services.
While increased regulation remains the top challenge, an overwhelming number of the 82 respondents also believe that proper data management can benefit their firm and 94 percent are confident they can adapt to the changing environment.
Managers selected increased regulation as their top near-term challenge.
Greater transparency requirements, enhanced protection for investors, as well as additional oversight for the asset management sector were named potential reasons behind the focus on regulation.
Increased regulatory obligations have also created a heightened sense of awareness of reputational risk among managers, RBC found.
The national poll found managers are addressing these challenges with a back-to-basics approach with 22 percent enhancing their service offering, while an additional 22 percent said
they were aiming to improve efficiencies.
Regulations requiring asset managers to disclose details of their costs to end investors may be a factor in the increased attention around improved efficiency, RBC said.
It added a more efficient operation could also allow managers to invest in an enhanced service offering.
RBC found 95 percent of respondents indicated that data can benefit their firm, enabling them to make more informed investment decisions (32 percent) and better anticipate client needs (27 percent).
However, the timeframe to accomplish these benefits is unclear since data analytics ranks a distant third on the list of technology priorities over the next 12 months.
Enhancing service offerings through enhanced client relationship management systems and increasing efficiency through process automation were also reported to be consuming near-term technology budgets.
David Linds, managing director and head of asset servicing Canada at RBC Investor & Treasury Services, said:
“With the business environment continuing to evolve, managers must ensure they remain competitive while addressing continued regulatory shifts. We believe that asset managers today are looking for more than commoditised custody services. They are looking for a true partner that understands the benefits of new technology and can successfully apply it to provide rapid access to meaningful data that helps them with their business decisions.”
He added: “It is particularly pleasing that the poll results support the investments we are making in our business, particularly with regards to data, technology, enhanced product capabilities and focused regulatory expertise.”
While increased regulation remains the top challenge, an overwhelming number of the 82 respondents also believe that proper data management can benefit their firm and 94 percent are confident they can adapt to the changing environment.
Managers selected increased regulation as their top near-term challenge.
Greater transparency requirements, enhanced protection for investors, as well as additional oversight for the asset management sector were named potential reasons behind the focus on regulation.
Increased regulatory obligations have also created a heightened sense of awareness of reputational risk among managers, RBC found.
The national poll found managers are addressing these challenges with a back-to-basics approach with 22 percent enhancing their service offering, while an additional 22 percent said
they were aiming to improve efficiencies.
Regulations requiring asset managers to disclose details of their costs to end investors may be a factor in the increased attention around improved efficiency, RBC said.
It added a more efficient operation could also allow managers to invest in an enhanced service offering.
RBC found 95 percent of respondents indicated that data can benefit their firm, enabling them to make more informed investment decisions (32 percent) and better anticipate client needs (27 percent).
However, the timeframe to accomplish these benefits is unclear since data analytics ranks a distant third on the list of technology priorities over the next 12 months.
Enhancing service offerings through enhanced client relationship management systems and increasing efficiency through process automation were also reported to be consuming near-term technology budgets.
David Linds, managing director and head of asset servicing Canada at RBC Investor & Treasury Services, said:
“With the business environment continuing to evolve, managers must ensure they remain competitive while addressing continued regulatory shifts. We believe that asset managers today are looking for more than commoditised custody services. They are looking for a true partner that understands the benefits of new technology and can successfully apply it to provide rapid access to meaningful data that helps them with their business decisions.”
He added: “It is particularly pleasing that the poll results support the investments we are making in our business, particularly with regards to data, technology, enhanced product capabilities and focused regulatory expertise.”
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