In the Investment Firm of the Future, we discuss how effective teams are working with smart technology as a key part of future success.
Investment firms build collective intelligence from well-trained professionals using disciplined decision processes and effective communications. These models’ success hinges on the ability of firms to deepen the range and adaptiveness of their professionals’ skills.
Competition will continue for professional talent among investment firms, particularly at the leadership level. This likely takes place in an overall shrinking of industry headcount in Europe and the Americas as costs come under growing pressure. Asset management firms’ headcounts likely mirror the trends at sell-side firms but with a lag. The challenge is to use fewer people to achieve more by changing the roles played by people and technology.xxxviii
What appears likely is that the collective intelligence of a group will matter more than individual intelligence and that investment firms will increasingly favor teams with technology models.
We anticipate that organizations will primarily seek to use technology to produce the enhancement of human roles with some net cost and efficiency gains. Technology opportunities will also, however, involve the displacement of roles, which will create challenges for leaders as they manage the cultural transition.
Technology enhancement will happen throughout organizations, particularly in portfolios, accounting, reporting, servicing, and decision support. In time, we are likely to see increasing use of metrics in the workplace for HR purposes, sourced from data wearables and the internet of things (IOT). We see this as two edged. On the one hand, it will be possible to measure aspects of human performance more accurately than before. On the other hand, the human response to this intrusive process will be very mixed and make such measurement counterproductive. Some middle-course pathway is likely needed.
Specialist roles in investment technology will inevitably grow to support its wider reach into all aspects of the organization. In particular, the demand for IT leadership (chief technology officer and equivalent) and data analysis, interpretation, and presentation will grow at a considerable pace.