The global investment management industry has entered a period of unprecedented change and turmoil.
KPMG's Global Investment Management practice is pleased to announce the launch of its survey report – Industry Insights – A snapshot of key trends, issues and challenges facing the investment management industry.
As the industry continues to work to put the global financial crisis in its rear-view mirror, it finds itself forced to contend with a host of challenges and threats from an array of external forces. We sat down with more than 30 Chief Executive Officers from a range of investment management firms throughout Europe. The objective was simple: to understand what are the most important and top-of-mind issues impacting the businesses of the industry's leaders. The CEOs with whom we spoke indicated there are a number of key issues that will require careful attention from the investment management industry in the days ahead:
- First and foremost is the continued instability on the geopolitical scene. Whether related to the changes in the energy sector, the political scene in the Middle East, developments in the eurozone or the continuing rise of China, these developments will have massive implications for the industry.
- The continuing wave of regulatory change will also continue to serve as a driver of industry transformation, including potential changes in business models, implications related to Big Data, possible divestitures and more.
- The continued pressure on margins in the investment management industry will likely lead to significant changes to industry distribution models, with some of the CEOs we spoke with predicting as much as 30 percent of the people/companies in the asset industry today will disappear in the next 10 years.
- In the `post-Madoff' era, investment managers will also be pressured to reassesses their approaches to operational due diligence, independent asset valuations and operational transparency. At the same time, there will be increased importance placed on the transparency of accounting practices as costs continue to rise more quickly than revenues.
And finally, there's the clear and present threat posed by technology companies such as Google, Facebook and a legion of nascent start-ups looking to capitalize on technology to disrupt the face of the financial services industry.
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