This year’s Forvis Mazars C-suite barometer paints a picture of an asset management industry keen to progress technology transformation initiatives. In particular, leaders in this sector report that the use of artificial intelligence (AI) will be a key factor in transformation initiatives. However, as a highly regulated industry, asset management companies need to take a cautious approach to implementing AI. In particular, data sources and cybersecurity are vital to the success of technology transformation initiatives and securing client trust.
Other strategic priorities currently shaping boardroom agendas include remaining open to growth opportunities while navigating political uncertainty and trade disruption. The findings also suggest that growth and technology transformation are becoming increasingly interconnected. By blending traditional and digital strategies, asset managers can achieve a more transparent, efficient and agile business model.
Current AI adoption in asset management is primarily focused on improving operational efficiency. According to the Forvis Mazars C-suite barometer, asset managers are using AI mainly for research and analysis as well as back and middle office automation. AI is also seen as a tool to support decision-making and gain a competitive advantage.
Beyond these core uses, AI technologies are gradually being adopted for a range of functions across the asset management value chain. AI-driven analytics are enabling firms to identify market trends, allowing for more personalised investment products. Operational efficiency is also being achieved by using AI to automate regulatory, financial and tax reporting. Importantly, AI’s ability to review thousands of annual reports and gather economic and investment research helps free up the portfolio manager’s time to make better, higher-quality investment decisions.
While AI’s ability to streamline functions and support decision-making is improving operational efficiency, asset managers see data integrity and security, including the reliability of third-party AI solution providers, as top challenges to overcome.
“For asset managers, data security is the primary barrier to AI adoption. Putting in place strict operational guardrails to strengthen data protection before deploying any AI solution is vital.”
Nargis Yunis Partner and UK Head of Asset Management, Forvis Mazars
As asset managers continue to experiment with AI, the potential applications extend to portfolio risk assessment and the detection of abnormal trading patterns. While still new, this second phase of AI adoption acts as an intelligent assistant to human portfolio managers.
Other AI uses in play help improve front and back-office functions by automating repetitive tasks and reducing operational risks. For example, removing manual processes for trade orders and dividend payments can help mitigate risk and achieve significant cost savings.
Allied to the use of new technologies is the emergence of digital assets and tokenisation. No longer just a trend, offering a percentage of digital assets as an investment choice is now seen as vital. Beyond keeping a growing proportion of investors interested in digital assets satisfied, it demonstrates the ability to engage with new technologies. As AI and technology evolve, focusing on specific use cases ensures maximum efficiency.
“In terms of how AI is implemented, asset managers further ahead than others are the ones that have taken a targeted approach focusing on using AI for a specific task such as removing an operational bottleneck. This helps pinpoint what structural and workforce changes are needed, which is less overwhelming than taking a scatter gun approach.”
Lucy Hampson Partner, Asset Management, Forvis Mazars
While the need for technology in asset management is clear, determining how to implement it successfully is both complex and critical. If AI is to augment rather than replace human expertise, firms must think strategically about their workforce and the regulatory landscape.
According to the Forvis Mazars C-suite barometer, while 33% of leaders report that AI is replacing roles, 55% state that it is already creating new ones. As demand for specialised AI and digital asset skills skyrockets, talent pools are straining and salary costs are rising.
“As well as putting human oversight and supervision at the core of AI deployment, asset managers need a clear roadmap on how to reorganise and reshape the organisation so that new and emerging technology augments rather than replaces human expertise.”
Jean Latorzeff Partner and Group Asset Management Leader, Forvis Mazars
To avoid stretching employees too thin during restructuring, firms must provide staff with the necessary technology and training to absorb new responsibilities.
Additionally, as global AI regulations take shape, asset managers must align with various compliance pathways. For multinational firms, AI-ready governance policies should be adopted globally and tied directly to risk registers.
Over 90% of executives in this year’s Forvis Mazars C-suite barometer plan to expand internationally. To drive growth, asset managers are targeting regions with favourable demographics and high savings rates, such as Asia's expanding high-net-worth and retirement markets. Also, while some plans are on hold following conflict in the region, the Middle East remains a significant wealth and sovereign fund market.
In the US, opportunities in the private equity and credit space are currently an expansion target for asset managers, as well as infrastructure assets. Increasingly, expansion targets are linked to a strategic pivot towards AI and data infrastructure, including the acquisition of data centres, energy management systems, and carbon capture and storage facilities.
Navigating local regulations and trading costs remain the primary challenges to international acquisitions, according to the C-suite barometer. In particular, compliance teams must carefully monitor ownership reporting requirements, which vary between 5% and 50% across jurisdictions. However, firms can manage these barriers through minority investments or strategic partnerships.
Agility is key. Firms targeting markets in the Middle East or Asia must have capital-raising plans ready to deploy quickly when conditions improve or new opportunities take shape. At the same time, consolidation in the sector persists, with major players acquiring niche firms to gain market share and lock in growth.
Ultimately, pairing a targeted investment strategy with technology transformation initiatives can provide the agility and transparency needed to manage such challenges and accelerate growth.
Asset managers view economic volatility and geopolitical tensions as their primary obstacles to growth, according to the Forvis Mazars C-suite barometer. While some asset managers have paused expansion projects until markets stabilise, others are looking to maintain growth by pivoting towards higher-yield funds to protect and improve margins.
“As well as looking for cost efficiencies, asset managers are rebalancing the split of their portfolios and moving into the higher-margin type of investment funds, like private equity, private credit, infrastructure funds and real assets to maintain growth.”
Muhammad Hossen Managing Partner and Global Head of Asset Management, Forvis Mazars
Rather than reacting to financial markets, asset managers can offer a broader range of investment funds across the entire risk spectrum, including cash, short-term, long-term, real and speculative assets, such as digital assets. This more proactive approach to diversification allows managers to shift investments as the economic and political backdrop evolves. It also helps retain investors seeking broader investment options.
While the asset management sector continues to digest and deploy technology transformation choices and initiatives, leaders who fuse traditional and digital strategies will secure a sharp competitive advantage.
Every year, we conduct research to understand the priorities and issues at the heart of our clients’ businesses. Our C-suite barometer gathers the views of executives from all over the world, giving us valuable insight into key topics on their agenda, the trends and transformations they expect to impact their company, the challenges and opportunities they are facing and their outlook for the year...
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