Daniel Behar / 22 June
June Newsletter – Digitalisation & Future Careers
Over the past few years, the asset management industry has been challenged by pressure on margins, increasing regulation, and the shift from active to more passive investment, the growth of sustainable investing. Most recently, the impact of the coronavirus pandemic has also taken its toll on the sector. Because of this, buy-side firms have attempted to accelerate operational change and digital transformation. There is a need to deliver data and analytics platforms that can increase efficiency, reduce costs and mitigate risk, while remaining agile and open to new business opportunities.
The digitalisation of firms in the asset management industry has been a slow process. Despite it being widely supported across the sector, almost two thirds (63%) of buy-side firms in the EMEA region have not yet completed their digital transformation programs (Fenergo, 2021). The pandemic and the subsequent introduction of WFH policies has created a number of challenges for these firms who are yet to digitalise.
These numbers highlight a big opportunity for AM firms, because with so many competitors lagging behind on digital transformation, there is a real opportunity to gain a competitive edge. The companies that are prepared to accelerate towards completion will be the first to reap the benefits. The digital transformation that has been taking place in recent years is not just having an impact on investment careers but also in other areas of the business, such as sales, marketing, product and operations.
From an investment perspective, big data & AI is a growing presence and has been instrumental in improving portfolio management, trading and risk management practices. Clients have been embracing the application of machine learning and AI models in order to make better informed investment decisions. In the last few years, we have seen digitalisation and technology play a big role in terms of the type of roles we have recruited for across all asset classes. Most investment focused jobs now require some level of technology knowledge and therefore candidates with a combination of investment and technical experience (i.e., coding and data mining skills), are highly sought after in the market.
Additionally, big data & AI has increasingly become utilised in the trading space on the buy-side to help identify optimal times and size for placing trades. As a result, there has been a huge demand in recent years for Traders with coding experience in Python, C# or C++.
Distribution & Marketing
Digital marketing has proven to be a key tool for investment management firms for a number of years now, particularly to reach out to younger investors who are active on these platforms. The pandemic has however accelerated this over the past year to access all types of investors. This has created new positions in the Distribution space and demand for particular skill sets.
A key shift is the transition to online events and meetings as the most accessible way to engage with investors. This has led to a requirement for candidates with online events experience using tools such as BrightTALK and ON24. There is also an increased demand for candidates with technical skills to improve digital platforms and user experience such as UX/UI Designers and Website Product Owners. In line with this shift, investment management firms have increased their email marketing capabilities creating a number of opportunities for email marketing specialists, particularly for professional contractors at a time when this knowledge is sought-after.
This new approach to sales and marketing techniques is likely to remain, as the methods of engaging with investors continues to evolve in the new workplace climate.
In the Product arena, we are seeing a higher demand for MI Analysts, a role which previously perhaps either didn’t exist or was absorbed by other functions within the business, such as Marketing or Operations. The findings of the work produced by MI analysts is being relied on more and more by Product Development and Product Strategy professionals as they design and implement new products.
The roles we have seen arise over the past 6 months have involved an MI Analyst sitting directly with the Product team, and gathering data related to competitor products or similar products in the market. The MI Analyst will monitor market trends and competitor’s funds (including the fund prices), and will collate data on this accordingly. Understanding such information can enable a Product team to strategically launch their own funds at the right time and price. Product candidates looking to shift into a more MI centric role should have some experience within a buy-side Product department, proven knowledge across asset classes (perhaps gained from studying the CFA) and proficiency in data platforms, such as Morningstar and Bloomberg.
In the wider Operations arena, previous manual and paper-based duties have now nearly all been digitalised, resulting in increased operational efficiency, time-saving and cost-effectiveness.
Likewise, nearly every role within Performance now requires candidates to have strong working proficiency in some level of coding. Candidates who can use tools such as SQL, VBA and Python are those most sought-after due to their ability to quickly analyse high volumes of financial data. These candidates are also usually adept at automating and streamlining processes using their data skills. The need for slick processes is now more apparent than ever with so many employees now working from home.