The results of an annual survey conducted by PwC shines a light on how wealth and asset management chief executives are lagging other financial services CEOs when it comes to adopting technology.
Although two-thirds of chief executives within the wealth and asset management industries consider rapidly-advancing technology a threat to growth, just 10 per cent plan to enhance their digital capabilities, according to a new report by PricewaterhouseCoopers.
PwC's Global CEO Survey questioned 185 CEOs from 45 countries between August and December last year. Overall, results suggest the wealth and asset management industries are confident about growth margins but are slow to innovate and adapt to opportunities from technology.
Some 92 per cent of respondents said they were “confident or very confident” about the growth outlook for the industries over the next 12 months, which was higher than the share for the broad financial services sector (86 per cent). Almost two-thirds, or 64 per cent, of CEOs said they were planning to recruit new staff to facilitate this anticipated growth.
Even though 65 per cent of the sectors' CEOs said they expect technology to “impact or reshape competition within five years”, only 10 per cent said they plan on subsequently strengthening their digital capabilities - slim pickings compared with the 23 per cent of CEOs across financial services who said they plan on improving their digital skill set.
Despite fears about the speed at which technology is changing, wealth and asset management CEOs believed it has had "less of a transformative impact" on their sectors throughout the past 20 years than on other areas of financial services.
Just over half, or 53 per cent, of respondents said that “technology has completely reshaped or significantly impacted” competition in the wealth and asset management sectors, compared with 74 per cent of banking and capital market CEOs.
“The sector has a dramatic need to drive technology adoption, global expansion, and recruit new talent,” said Barry Benjamin, global asset and wealth management leader at PwC.
He added: “Their responses to issues on technology begs the question: Is the sector preparing fast enough?”
Meanwhile, 62 per cent of CEOs said it has become "more difficult to gain trust". This downfall could be attributed to controversy surrounding management and transactional fees, as regulators worldwide tussle with wealth and asset managers in a bid to enhance transparency levels between managers and their clients. Managers often argue that value for money is subjective, and that a one-size-fits-all approach towards management fees is not always effective.
Last year, industry figureheads warned that the UK asset management sector will feel the “full force” of the country's financial watchdog's powers after a study highlighted a plethora of concerns over transparency and value for money.