Fintech is a growing challenge
Asset managers raise IT spend to combat cyber threats
Asset managers are planning to raise spending to combat future cyber attacks, according to analysis from the latest CBI/ PwC financial services survey.
Despite business volumes falling at their sharpest rate since March 2009, firms are ramping up investment in technology to improve operational efficiency and customer engagement.
This is expected to include spending to mitigate cyber threats. Regulation continues to drive much of these system changes.
Allan McGrath, asset management partner at PwC in Scotland, said: “The increasing pressure on margins is highlighting the need for asset managers to improve their operating efficiencies.
“Replacing legacy systems and building efficient end-to-end systems reflects a long-term investment within the industry, as they strive to compete in an increasingly competitive market.
“There is also a focus on distribution platforms, with asset managers asking themselves how they can develop their own platforms to retain more revenue. Improved customer engagement and experience is also a priority when investing in new technology.”
The survey reveals that asset managers view the growth of FinTech firms as a threat to profitability, with a large number of respondents undecided on the impact these firms will have on the industry. Forming strategic partnerships will continue to be a focus for asset managers.
Colin Slater, cyber security leader at PwC in Scotland, added: “Regulation continues to drive system changes, but is starting to become business as usual. An intention to increase spend on safeguarding against cyber risks is not surprising and is in line with what we are seeing in the Scottish market as well as across the wider financial services industry.
“There is certainly a heightened awareness in the market of the threats emerging from both large existing retail and technology players as well as new FinTech entrants. However, there is still a question as to whether these start-up companies achieve the necessary scale whilst grappling with regulatory compliance.”