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Due to rising economic, social, and technology trends, the investment management industry has undergone a major transformation. Small businesses and asset managers have shifted their focus towards adopting an innovative mindset that helps them gain competitive advantage, better decision making, and effective workflows. In addition, embracing groundbreaking technology has helped business firms to change their business trends and transform operating models.
According to a recent study of Reinventing Operations in Asset management, constantly shifting customer demands and new market competitors have compelled the organizations to accept new trends that address every core capability across the enterprise—front, middle, back office, and infrastructure. Modern trends involving investing and financing can help businesses improve productivity, profitability, and competitive performance. They are responsive, allowing businesses to know how the incurred costs structures and alternative investments can deliver value to the organization. Moreover, they have observed that a substantial number of companies agreed that new revenue opportunities would provide the greatest lift to firms, enabling them to alter their static operating model to a dynamic, data-centric model.
Revenue opportunities come from new and innovative products and distribution channels. Some firms are also looking to monetize capabilities beyond their product and asset management competencies. Consequently, the long-run rate of return on investments and awareness of software capabilities helps reinvent the underlying value chain.
“If there is one common theme to the vast range of the world’s financial crises, it is that excessive debt accumulation, whether by the government, banks, corporations, or consumers, often poses greater systemic risks than it seems during a boom.” — Carmen Reinhart
Business firms need to be aware of debts during financial crises. It is difficult to predict how a recession can ruin a business. The best investors look up to modern business and investment trends that help them make challenging decisions based on real facts and analysis rather than risky, speculative forecasts.
Katina Stefanova- An angel investor In Asset Management
Katina Stefanova is the founder of Marto Capital, multi-strategy asset management and advisory firm focused on optimal asset allocation. Her services include investing in disruptive asset management companies, enabling them to monitor their profit curve and value chain, and providing a roadmap of innovative technologies to improve investment lifecycle.
Stefanova has served as a management committee advisor at Bridgewater Associates, the largest hedge fund in the financial industry. She held investment and management leadership roles and oversaw the firm’s various areas, including technology and middle and back office. In addition, she helped the firm to institutionalize by licensing their proprietary, increasing software capabilities, and adopting advanced technologies across all parts of their business—products, services, engagement, and value chain.
The founder and CEO of Marto Capital developed an investment plan to enhance the business function. She developed the framework of disruption in investment. This plan has helped the firms create new products, bring new clients, and help to introduce the firm in a new marketplace. The investment model by Marto provided access to proprietary investment opportunities and capital sources. The model has helped the companies to share research insights, best practices, technology infrastructure, and information on implementing digital technology in investment and operational processes.
With the help of this expansive experience, Marto Capital has been able to tap into various fields and industries, gaining insight into every aspect of the marketplace. This allows investments in lucrative opportunities, benefiting the organization and the clients. All the assets at Marto Capital get maximum exposure to calculated risks and are aligned with the client’s objectives. These risks are taken based on multiple market signals.
The Key Trends by Katina Stefanova have led The Asset Management Industry with benchmark performance
Client preferences and expectations
It is essential to know which kind of customer the company attracts and how it influences purchasing the product. The customers help increase the prospects of sale growth and increase relative profitability. Consequently, the asset management industry has led firms to focus on gender balance. This implies women and millennials invest. The change in the values has helped to decrease the toxic culture of male-led investment managers and has altered the preferences and investment criteria of the investors.
Stefanova believed that focusing on client preferences develops meaningful customer relationships that deliver the right offering to the right client at the right time. Moreover, the managers need to analyze ongoing shifts in customer behaviors, changes in regulations, and the increased pace of technology innovation. Strong client relationships establish enhanced competitive positioning.
Competitors In Local and International Market
Sale and marketing tactics of the competitors’ matter. According to Stefanova, competition among firms may cause desire competition, product form competition, and brand competition. This implies that financial firms assess a few important questions concerning their competitors. For instance, the firms should know about the impact of a product launch by their competitors, and the price variation may affect the sales of the other competitor. Moreover, business trends have increased productivity in the face of rising costs, enabling companies to design more customized products to meet customer demand and increase value-added services.
The leaders of asset management firms recognize that competing with industry peers helps them to match or better their services and learn to respond to the changing needs of their customers as retailers.
Technological factors
As organizations move towards the digital future, they learn that technological factors enhance skills and abilities to accelerate production, optimize performance and efficiency. Digital tools create a big impact on how well the business is running. Some of the digital tools that are more used now by business organizations are:
- Automation
- Internet connectivity
- 3D technology
- Speed/power of computer calculation
- Engine performance and efficiency
- Security in terms of cryptography
- Wireless charging
Digital data strategy
With increased connectivity, asset management firms can gather more data and analyze it to improve insights and enable change, optimization, and process improvement. In addition, the Internet of Things (IoT) in manufacturing, sometimes called the industrial internet of things or IIoT, enables companies to connect and monitor a multitude of operational components.
To ensure transparent and safe backup of data, a more agile operating model is operated that validates an effective data foundation that promotes reliable, clean data and helps to manage data well.
Asset management firms moving from reactive approaches towards a forward-thinking approach
Firms need to move away from reactive approaches to all aspects of risk management towards forward-thinking strategies. Stefanova states that investment firms should build a more proactive risk management function. It comprises scanning the horizon for the next threats as risks and manifesting more solid approaches to protect all data and assets. In addition, addressing the economic pressures and helping their company create an agile operating model that aligns the firm’s organizational structures with its priorities, reduces costs, and improves client engagement.
The rise of environmental, social, and governance criteria (ESG) in managing a business
Stefanova suggests using (ESG) to improve asset management. New generations of investors are increasingly demanding to use this method as these factors validate the company’s sustainability. Once enough data has been acquired, the companies get involved with the investment process, deciding what equities or bonds they need to buy or what suitable investment opportunity will allow them to boost their asset management.
Blockchain
Blockchain has allowed for seamless aggregation of all information, delivering significant value for industries and companies. Blockchain also helps businesses utilize the full potential of other advanced technologies like IoT, 3D printing, and augmented reality. At a high level, investing in blockchain means investing in companies developing blockchain technology or using it in their business infrastructures. Big banks, Amazon, and even credit card issuers have announced new investments in blockchain technology in recent months. As our global financial system becomes more connected with digital transformation, investors are well-advised to learn how blockchain changes the investment system. By using cryptocurrency, and Bitcoin, the investors have gained interest in digital investment opportunities.
As Cryptocurrency aspires to become part of the mainstream financial system, it needs to satisfy the increasing needs of the investors. Over a few years, Bitcoin has attracted more investors in subsequent years. The investors found Bitcoin superior to other mediums of exchange. Bitcoin is a fixed unit of account and is easily divisible and transportable. Moreover, digital currencies are being accepted as a form of payment with vendors and retailers. Therefore, digital currencies such as Bitcoin have been accepted as a form of payment with retailers for investing and trading different goods and services.
Hence, Stefanova’s goal is to rebuild a sense of trust in her clients by establishing diversity and inclusion. Furthermore, the direct link with technological advancements such as robotics, Artificial Intelligence, and Blockchain led to efficient operations, reduced costs, improved efficiency, and portfolio growth.
Katina Stefanova states,
“We are here to make money for our clients, but we also are focusing on operating with a level of integrity and transparency that allows us to avoid prevalent ethics issues.”
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