As one would expect, when the pandemic struck the world last year, the market underwent quite a disruption.
And the disruption was not by any means positive, as the word ordinarily means in the tech industry.
Still, with disruption comes breakthroughs.
And the disruption last year saw breakthroughs in the form of insights or themes that shed light on the emergent future of investing.
Here are three that stand out.
Data front and center
Asset managers globally agree that data is going to be the single biggest advantage in the coming future.
Accenture, in fact, puts the figure at 95%.
That is right.
In a large-scale study conducted by Accenture, a whopping 95% of respondents agreed that data is going to be the competition’s single biggest differentiator.
To be fair, that should not come as a surprise.
The advantages of leveraging data analytics were quite clear from the beginning.
Now that the technology for predictive analysis has caught up, data has been conquering industries at a frightening pace, from finance to football.
Data analytics is so incredibly successful because it generates and validates insights based on evidence, instead of instinct.
That is, of course, especially vital to managing assets where the stakes are much higher, where the need for accuracy is paramount.
Still, the challenge remains — quality.
When data and technology become cheap and accessible to all, one would expect all players to thrive.
Of course, that is not the case.
The insights and forecasts generated by data analytics are only as accurate and high-quality as the data fed to it.
Which brings us to the next big theme.
More proficiency, less products
Data and technology are everywhere. The two are reasonably cheap and accessible.
What is not cheap and accessible is the proficiency to understand and leverage them.
And experts agree.
Accenture’s study also reported that more than 75% of the participants put their money on capabilities instead of products.
The advantage may seem slight, but it is significant.
Think about it: enterprises that blindly heed to data-driven insights are not any better than enterprises that rely on intuition.
Both make crucial, expensive strategic decisions without understanding what they mean.
Rather, understanding how data works, how qualitative or quantitative analysis works, for example, allows enterprises to separate cause from effect.
Such enterprises have a better hold of things, knowing what went wrong, and why.
And when the stakes are high, that understanding can save investors millions and perhaps billions in capital.
And that is just the analysis. What about data collection? What about sorting?
A good analyst understands that collection and sorting are critical to data quality.
He or she understands that collection and sorting need as much scrutiny — some would argue more — as the algorithms that process data to yield insights.
If data is going to be front and center, we need supervision across all sectors.
That demands more thinking than doing.
More personalized products
Asset managers that can combine data and proficiency will leverage the powerful combination to develop or find products tailored for their clients.
Personalization is perhaps the biggest benefit data analytics has to offer.
Since such a product or service is customer-centric, developed keeping only and only a customer’s needs in mind, it is highly likely that the customer will engage with it.
In fact, personalized products are not exclusive to asset management, but are near-universal, driving media and entertainment, e-commerce, and social media, to name a few industries.
As time passes, more themes will emerge. But these three are certainly here to stay.
