Resilient as they are, Canada's asset managers have not been immune from the impacts of COVID-19. The public health crisis has upended long-held approaches to customer relations, service delivery, and workforce management. Shifting investor appetites and economic uncertainties have also given rise to adapted market strategies.
Like many industries, the challenge is clear: adapt to the new reality or make way for those who can. And as stakeholders within KPMG's 2020 asset management opportunities and risks report show, the Canadian industry is up to the task. Across the board, asset managers are fast-tracking their digital transformations to follow customers online and adopting new tech and mindsets to manage "hybrid" workforces. Moreover, they're responding to fee pressures and tighter competition by unlocking efficiencies and seeking growth among their existing portfolios.
Staying competitive while managing a global pandemic is no small challenge. Add elevated cyber security risks, regulatory pressures, and evolving client needs to the mix, and its little wonder why firms share tempered expectations for the months – and possibly years – ahead. Promisingly, Canadian asset managers are rising to these challenges with their trademark resilience and a willingness to adapt to the new reality.
1. Redefining business and operating models
What it means
COVID-19 has crystallized the need for asset managers to transform business and operating models to become more resilient, agile and flexible in a challenging environment.
Impact on asset managers
What to think about:
2. Accelerating digital, transforming through technology
What it means
The industry has been slower to adopt new technologies than many other sectors. COVID-19 has been an awakening.
Potential impact on asset managers
What to think about:
3. An evolving risk and regulatory landscape
What it means
Regulators want to encourage recovery and growth, but ensure that happens in a controlled way that protects financial stability and takes greater care of customers.
Potential impact on asset managers
What to think about:
4. Redesigning the future of work
What it means
Operating in a more decentralized environment has focused minds on the need for change as a new future of work emerges.
Potential impact on asset managers
What to think about:
5. Embedding ESG across the investment approach
What it means
The shift towards sustainable finance has markedly accelerated. In the wake of COVID-19, this trend will be even more pronounced.
Potential impact on asset managers
What to think about:
6. Look East: navigating business opportunities in China
What it means
China has long been recognized as the biggest single opportunity for new business and growth in the asset management industry – COVID-19 hasn’t changed that.
Potential impact on asset managers
Beyond a world dominated by COVID-19-related restrictions on economic activity, we anticipate opportunities for fund managers to either expand their existing footprint or enter China for the first time.
Two critical questions to answer about China: