The local investment industry is increasingly on the hunt for data and technology solutions in an era of accelerating change, the third annual BNP Paribas/Investment News NZ survey has found.
While regulation remains the most pressing concern for the NZ investment industry, the survey found ‘data and technology’ was almost on a par – especially for those operating on the asset management side of the ledger.
Overall, regulation was the top worry for 23 per cent of respondents, compared to 24 per cent in last year’s survey and 34 per cent in the inaugural 2016 study.
But excluding financial advisers almost 17 per cent rated data and technology as their biggest concern for the year, just about equal with regulation.
Unsurprisingly, regulation was causing more angst for advisers given their industry is about to face further upheaval under the Financial Services Legislation Amendment Bill (FSLAB). Asset management participants, however, appear more settled almost two years post the full implementation of the Financial Markets Conduct Act (FMC) regime.
According to the survey report, the rising interest in data and technology “has partly been fuelled by the ongoing environmental, social and governance (ESG) trends highlighted in previous surveys, and continued in this report”.
“And in an era where artificial intelligence (AI), blockchain and robo-advice have evolved from interesting concepts to working models, the demand for high-quality data and sophisticated interpretative tools can only increase,” the report says.
Doug Cameron, BNP Paribas Fund Services NZ location head, said the survey confirmed anecdotal evidence that firms across the asset management industry were seeking technological and data analytical tools to help manage risks and drive opportunities.
Cameron said “data analytics has become a service in its own right”.
“Asset managers for instance, are calling out for service providers to offer a central depository of information, outputting actionable insights to help and identify problems, as well as harness opportunities,” he said in a release. “The custody industry is rising to this challenge, identifying ways to enrich the vast amount of data they hold while offering flexible ways for clients to self-service and maintain control over their own data.”
The twin themes of technology and regulation emerged particularly in a survey finding that almost 70 per cent of respondents would be interested in ‘regulatory reporting as a service’.
Aside from regulation and data/IT, respondents also rated market or economic shocks as a major worry – albeit one that has remained a steady 12 per cent over the three-year period covered by the survey.
Other key findings in the study include:
- the industry is getting serious about digital solutions including how to implement AI solutions and maintain cyber-security;
- ESG remains a high priority with almost 60 per cent planning to increase their focus on responsible investment in the year ahead; and,
- global equities remain the investment destination of choice while KiwiSaver is increasingly seen as the most important source of flows for managers.
A free copy of the report is available by clicking here.
