The latest World Economic Outlook from the International Monetary Fund (IMF), in October 2020, highlights the importance of preparing for what the Fund predicts will be a “long, uneven and uncertain” recovery – on the back of projections that the global economy will contract by 4.4% in 20201.
Against this backdrop, asset owners and investment managers must adapt by developing the right capabilities and infrastructure across their front, middle and back offices to help them secure positive and sustainable growth.
We had already pinpointed the need for this type of transformation amid the key themes shaping the future of the global investment industry in “2020 and Beyond: A New Era of Transformation for Buy-side Leaders.”
Now, in the wake of COVID-19, not only have these trends endured, three of them have accelerated significantly:
- The development of digital-first strategies and mindsets that align with the acceleration of digitalized economies, and with more open and connected information ecosystems.
- The role of data and analytics as a key differentiator in driving solutions, reporting and insights, as well as enhancing efficiency, cutting costs and reducing risk.
- The search for yield via greater allocations to alternative investments and emerging markets, and the need for infrastructure to support this shift.
As buy-side leaders assess how best to respond and reposition themselves amid today’s challenging market environment, it is clear that a new approach is needed to business models, investment strategies and operational processes. To future-proof investment processes, asset owners and investment managers must account for and embrace changes related to these three trends.