PwC: AI to drive revenue growth in asset management

The vast majority of asset and wealth managers have set out plans to tap into the potential artificial intelligence (AI) brings to bolster their growth over the next few years, a PwC report has found.

In PwC’s 2024 Asset & Wealth Management Report, published today (19 November), the consultancy found that wealth managers looking to adopt AI are expected to benefit from a 12% boost to their revenues by 2028.

The report also found that 81% of the 264 asset managers and 257 institutional investors polled from around the world are looking to enter strategic partnerships, consolidation or M&A deals to enhance their technological capabilities.

There was also the intention to build an “extended tech ecosystem” among the participants to the study, as they looked to innovate their offerings and expand into new markets in a bid to “democratise access to investment products ahead of a great wealth transfer”, PwC found.

The report forecast that global assets under management held by asset and wealth management firms are expected to hit $171trn by 2028, with the use of tokenised products soaring at a compound annual growth rate (CAGR) of 50%.

As the race to bolster technology-led offerings and services heats up, Albertha Charles, global asset and wealth management leader at PwC UK, noted that to emerge as leaders in this “new digital-first market”, firms must invest in their transformations.

This is “while also ensuring they are re-skilling and upskilling their workforces with the necessary digital capabilities to remain competitive and innovative”, he added.

As such, she argued the PwC report called on asset and wealth managers to “rethink investment strategies”, as companies’ long-term survival and viability will lie on a “radical, fundamental and continuous reinvention of how organisations create and deliver value”.

Charles continued: “Strategic partnerships and consolidation will play a vital role in building tech ecosystems that will facilitate a greater transfer of ideas and expertise.

“Smaller players will be able to bring their systems up to speed quickly and cost-effectively, while allowing larger players to access talent and insight pivotal to growth, particularly as new and emerging technologies such as AI transform the investment management landscape.”

Source: PA