Investment managers and portfolio management vendors facing new regulatory challenges
Technology vendors in Europe are investing heavily in the development of portfolio management and accounting systems to help buy-side asset management clients navigate new regulatory requirements.
That is according to a report from Aite Group – Leading Portfolio Systems, European Edition: La Vie en Rose – the latest in a series providing a guide to the global portfolio management and accounting systems market.
The overall global portfolio management and accounting systems market represents about USD3.3bn (GBP2bn) in spend.
For institutional asset management, hedge fund and asset servicing client markets in Europe, the market size was USD689m (GBP414m) in 2013, and Aite Group expects this market to grow to USD726m (GBP437m) by 2017 at an annual average growth rate of 1.3 per cent.
Though European financial market woes shut down the replacement market, 2013 was a year of change in the vendor, regulatory, and economic landscapes. Indeed, the changing environment may well inspire an active European replacement market for portfolio management solutions. A number of solutions are aggressively improving graphical user interfaces, work-flow processes, and reporting – all needed enhancements.
Challenges for European investment management firms are similar to those of firms in other regions. Firms must navigate an abundance of new legislation at home as well as in foreign locations where they conduct business. Institutional investors are more demanding than ever in terms of service requirements and investment performance; for senior executives, expense management and operational efficiency are top of mind.
The amount of regulation hitting the global industry suggests that more analytics will be required in the future. The increasing availability of data also poses a challenge: portfolio systems must retrieve and store more amounts and types of data. Aite Group believes formal partnering could further some vendors' needs to expand solution functionality in support of clients' growing business needs.
“Market recovery will require portfolio systems vendors staying visible with the asset management and hedge fund community, doing what they do best, and continuing to invest in the product,” says Denise Valentine, senior analyst in institutional securities & investments at Aite Group. “If you haven't already, add a solid dose of customer service and creative thinking through partnerships, new geographic markets, and services to continue to enjoy profitability.”
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