Looking Ahead at 2022

Thusith Mahanama

03 Jan 2022

The door to 2021 is officially closed, and that comes as good news to those ready to kick off a great 2022. For the asset management space, there are many reasons to be excited about the road ahead. For one, we just turned the page on a year where businesses and firms began inserting ESG and Diversity and Inclusion details into the decision-making process.


We also concluded what I like to call the great technology pause of 2021. Spurred by the pandemic, there was a mass industry-wide realization that a technological evolution is imminent. With this realization came a period of self-reflection, where firms assessed their current environments and strategized for the future. That work isn’t going away, in fact that's my top prediction for what will shape the year ahead.


Let’s get into it! Here are our predictions the ideas and trends that will prevail in 2022.


1)    The Great Tech Acceleration

The Great Technology Acceleration features a few key areas, which begin with cloud.


·      Cloud and Consolidation

When evaluating their technology environments, businesses identified several priority areas. The first is the cloud. Cloud is certainly not a new concept, but it is a force that many asset management firms have resisted. Then came the pandemic, and with it a wake-up call to the entire industry.


But it's not just about cloud migration. As security threats continued to grow in 2021, firms reviewed their vendor relationships and recognized another priority—these cloud migrations must include a consolidation of vendors to reduce unnecessary complexities and create more secure environments.


·      Cleaning the Data House

Once in the cloud, firms will identify new opportunities to put their data to work. What they will also discover is that their data house is not clean. This includes the nuances they will find in areas such as day counts used in performance calculations and more. Teams will have to refocus energies on cleaning up the data house to leverage their data.


2)    Investing in Automation

Following cloud and data will be an increased demand for new capabilities. These include:


·      DDQ functionality

My previous blog touched on the growing use of DDQs and the manual efforts required to complete these reports. In 2022, there will be a surge in demand for DDQ functionality that automates this process, making it easy for firms to produce these for clients and consultants in mere minutes.


·      Commentary

With any investment comes commentary that clearly articulates the reasoning behind investment decisions. While vital, providing these insights takes time which multiplies significantly when unexpected events force teams to make fast, ad-hoc decisions. Over the next year, firms will begin onboarding capabilities that can automate the creation, editing, review, and delivery of all investment commentary.


·      Compliance

If there's one thing firms can count on, it's compliance requirements. In 2022 firms will seek out ways to better manage paper and audit trails and avoid any costly errors while simultaneously reducing the number of people involved in the process. The optimal solution will be a data warehouse that creates one single source of the truth. The warehouse will centralize all qualitative and quantitative information and then feed it into all sales and communications materials. This not only ensures that all documents have the latest data it also provides more visibility into how people are engaging with this content.


3)    T-Shapping Your Workforce

2022 isn’t all about technology. The people in our industry will continue to be a major area of focus and an important competitive differentiator for firms.


This year, firms will look to infuse new skillsets into their business. This includes T-Shaped skills. For those not familiar with the term, it's essentially a person who has deep expertise in one function area but can also work successfully outside of this core area and collaborate with others. In the year ahead, many firms, especially those smaller in size, will look to complement their new investments with employees who have T-Shaped skills and can serve the business in various ways. By T-Shaping the workforce, companies can streamline their teams and better maintain business-as-usual, even during periods of significant disruption.


Speaking of disruption, I feel the collective excitement of the industry as we close the books on 2021. It was a year like no other and presented a variety of challenges. But with these challenges came a long-overdue disruption to an industry in need of change. Now, as we look forward, I can also feel the excitement among investment firms that are ready to execute their transformations and deliver a new level of value to their clients.