Top Fintech Trends For Asset Managers In 2019

Automobiles, healthcare, entertainment, personal banking… it seems every sector in the world is undergoing rapid disruption at the hands of technology. Financial services, though often slower to adapt than Silicon Valley, is no different. A growing base of Millennials investors is forcing firms to rethink everything from portfolio construction to digital customer support.

Here’s a look at the top three fintech trends to keep an eye on this year.

The Blockchain

There’s a lot of hype (and misinformation) around Blockchain due to its association with the highly volatile crypto-markets. But at its core, Blockchain promises to make the world – and capital markets – a safer place.

For the uninitiated, Blockchain is a decentralized system which records transactions in a distributed database that can’t retroactively be altered or forged. Applications outside of financial services include digital IDs, medical records, weapons tracking and preventing copywriting. Blockchain is set to be a big disruptor in asset management too, by facilitating real-time asset tracking and reducing the risk of a data breach to zero.  

Artificial Intelligence And Big Data

In today’s world, data is being generated faster than ever. Internet usage alone produces 2.5 quintillion bytes of data each day, and that’s just the tip of the iceberg. Credit card transactions, satellite imagery, shipping maps, weather forecasts… the list is endless, and asset managers that move fast enough to mine this data will supercharge research operations, alpha generation, and risk management.

While the sheer amount of data is ballooning, fortunately advances in artificial intelligence are making it possible for asset managers to actually analyze the data to find signal in the noise. Regulators like the U.S. Securities and Exchange Commission are experimenting with AI to rake through the data garnered from asset manager’s regulatory reporting. Meanwhile, AI will be used to automate many mundane and repetitive asset management tasks including data entry, fraud detection, data cleaning, and customer support.

Cloud-Based Data Warehousing

There are many benefits for business in implementing a data warehouse, which is a central repository of data from multiple source systems. For asset managers, data warehouses have the potential to drastically improve business intelligence by allowing fund managers to measure performance across asset classes; analyze sales data across products and services; and aggregate external data sources with internal data for more robust risk management and compliance. The biggest trend to keep an eye on is the shift of data warehousing to the cloud. While some asset managers still prefer on-premise data warehousing, a growing percentage of them are now opting for the flexibility of the cloud in what is essentially a pay-as-you-go basis.