February 24 – A global survey of 2,000 investors and 500 investment providers sponsored by State Street Corporation (NYSE: STT) has identified three aspects of data that will define stewardship for the digital age: Integration, the ability to combine both structured and unstructured data; Intelligence, the ability to draw new insights with the help of emerging technologies that will enable improved decision-making, performance measurement and client centricity; and Integrity, the ability to better safeguard data with the highest levels of security1.
The new report titled, “Finance Reimagined: Finding Long-Term Value in a Digital Age,1” combines quantitative research with views from industry experts, to explore how firms across the financial services industry are using digital technologies to enhance their businesses. Respondents to the survey included universal banks, mutual funds, alternative investment firms and fintech (financial technology) start-ups.
While eight in ten (81 percent) investment providers surveyed say digital transformation is important for the future of their organization, few firms are rallying to be at the forefront of digitization. Yet nearly one-third of investors (28 percent) admit to lagging behind other firms in the industry in applying digital technologies to transform business strategies, processes, and services.
“Digital transformation is driving a seismic shift in the investment industry,” said Lou Maiuri, head of State Street’s Global Markets and Global Exchange businesses. “While it’s critical to understand how new technologies can deliver immediate improvements in efficiency and insight, to become digital leaders, those in the finance industry also need a long-term vision for digital transformation that goes beyond simply adding the latest technologies to an existing infrastructure.”
Like firms, individual investors surveyed believe digital technology is the way forward, and admit they are more likely to work with established financial partners over fintech companies.
- 82% of investors say their provider will need to stay at the forefront of technology in the next five years
- 63% will want personalized advice in the future, and 59% expect to use do-it-yourself capabilities such as tools that enable them to self-manage their investments
- 40% say they would avoid fintech businesses due to higher cybersecurity risks
The report identifies how investment firms can recognize and act on opportunities to digitize aspects of their organizations by highlighting several shared beliefs of digital leaders:
- 41% of digital leaders believe it’s critical to adequately invest in new technologies like cloud and artificial intelligence
- 31% note the importance of having the right talent in place in combination with a strong customer-centric focus
- 29% believe that prioritizing cybersecurity is the foundation for building solid client relationships based on trust and transparency
“We’re focused on how deep-rooted digital innovation can generate new value for our clients by developing highly personalized, data-driven products that appeal to a broader range of investors,” continued Maiuri. “By increasing the ability of institutions to understand and act on their investors’ needs, the three I’s enable the financial leaders of the future to create transparent, flexible services that increase trust and confidence in the sector — redefining stewardship for the digital era.”
“New digital technologies will enable firms to provide a more fluid, dynamic and interactive investment experience for clients,” added Antoine Shagoury, chief information officer, State Street. “Moreover, they will help the industry to deliver the type of personalization investors are increasingly demanding, at scale. Firms that neglect to understand and embrace emerging technologies from Blockchain to artificial intelligence will also fail to remain competitive in this new era of finance, while those who live and breathe the digital revolution will be those who define the future of the sector.”
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About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world’s leading providers of financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $29 trillion in assets under custody and administration and $2.47 trillion* in assets under management as of December 31, 2016, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s website at www.statestreet.com
* Assets under management for State Street Global Advisors (SSGA) were $2.47 trillion as of December 31, 2016. Assets under management reflects approximately $30.62 billion (as of December 31, 2016) with respect to which State Street Global Markets, LLC (SSGM) serves as marketing agent; SSGM and SSGA are affiliated.
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1 Roubini ThoughtLab conducted a rigorous research program from March to July 2016. This research was sponsored by State Street surveying a total of 2,000 investors and 500 wealth service providers across 10 leading markets, including the US, the UK, Germany, Australia, China, Hong Kong, Mexico, Canada, Switzerland, and Japan.