DigFin asked Carmen Wee, CEO of the Investment Management Association of Singapore, to tell us how leading asset managers will use technology in 2023. Here is her response.
Given the volatile markets, it is imperative for fund managers to be nimble. And that includes going digital.
Fund managers that have embarked early on their digital journey are reaping the fruits of their labour. They are able to employ new portfolio management tools, operate across digital trading platforms, use big data analytics to enhance their investment process, and create new sources of alpha.
The advent of online marketplaces and robo-advisors has also revolutionized the way service providers interface with the consumers. These environments are making investments much more convenient and accessible, even for the traditionally underserved segments.
Pushing into 2023, ESG data, wealthtech, and the rise of the metaverse will continue to resonate with the marketplace.
New template for success
Disruptive technologies are forcing financial institutions to change. Many fund managers have invested heavily in technological transformation or actively collaborated with fintechs to keep ahead, and this trend is here to stay.
In addition to individual firm efforts, the industry is also now fully supportive of digital transformation in asset management. For example, in Singapore, the IMAS Digital Accelerator Programme (DAP) served as an industry platform for fund managers to discover and incubate promising fintech solutions and forge successful commercial partnerships.
This has led to the birth of new industry solutions around harnessing blockchain technology, A.I., natural language processing (NLP) and machine learning tools.
The area of wealthtech is transforming so quickly that it is impacting business lines. We will see even more convergence. Fintech start-ups and other non-FIs have entered the wealth management space while large financial institutions have moved into the robo-advisor space. Traditional players are collaborating with non-traditional players to stay ahead – that’s the new template for success, because it is a response to what our customers are doing.
Engaging customers
Wealth tech in Singapore will continue and mature in response to increased appetite from investors, acquisition deals and rising demand from younger investors for automation in financial services.
The more digitally savvy consumers will welcome the convenience and control over their investments on the go. HNWIs are also leveraging wealth tech for advice on their investments; mass affluent investors are also using these tools to manage investment portfolio themselves and perform due diligence.
We can anticipate new ways of investor engagements as financial influencers mushroom in the digital space, complementing the development of digital wealth services.
What’s your metaverse strategy?
2023 could well be a defining year for the metaverse. The metaverse will enable content creators to connect with audiences in a whole new way. The plunge in cryptocurrencies has made it possible to purchase land in the metaverse even more cheaply. Business giants like HSBC and J.P. Morgan have already staked their claim and begun building their virtual presence.
As financial institutions turn towards ESG practices, the metaverse could offer a novel and sustainable way of engagement while effectively managing carbon footprints. Product launches, training, networking, and large-scale events can take place in the metaverse, by offering a new immersive and virtual experience ushered in by advance technologies such as augmented reality and virtual reality.
he seamless transition between virtual and physical environments could enable interaction to transcend beyond natural geographical boundaries and timezones, fostering meaningful connections virtually.
Over the next 12 months, we could see more businesses positioning themselves at prime virtual locations – whether that’s through building their own platforms or occupying existing arenas like Sandbox or Decentraland. Or maybe something new will come along!
Either way, 2023 will be an exciting ride as we begin to see meaningful success stories from asset managers and wealth managers that take digital transformation to heart.
