CEOs in Asset & Wealth Management are confident about the growth prospects in the industry, but concerned about the impact that technological change could have in the next five years.
A new PwC global report, Asset & Wealth Management: a new era of growth, disruption and opportunity, based on the opinion of 185 Asset & Wealth Management CEOs from 45 countries, reveals that 92% are confident or very confident about the growth outlook over the next 12 months. This figure is up from 90% last year and is higher than the 86% average across the financial services sector.
Yet, with only 10% of Asset & Wealth Management CEOs planning to strengthen their digital capabilities (compared with 23% across financial services), there are signs that the sector is slow to adapt to technological opportunities.
Leader of PwC EMEA's Asset and Wealth Management practice Olwyn Alexander said: “The sector has a dramatic need to drive technology adoption, global expansion and recruitment of new talent. Industry responses to issues on technology beg the question, is the sector preparing fast enough?
“PwC estimates that assets under management in Ireland have the potential to grow to in excess of US$5 trillion by 2020. Despite global uncertainties, we remain confident about the industry's future growth capacity."
CEOs five biggest concerns in the sector are the availability of key skills (71%), the speed of technological change (66%), changing customer behaviour (64%), lack of trust (61%) and cyber threats (59%).
Ireland is well placed to thrive and reap the benefits of anticipated growth, say the experts, but will need to lead the adoption of new strategies.
"The enduring low interest rate environment and expansive monetary policy gives plenty of cause for optimism going forward," said Alexander . "Looking at global shifts towards passive investment trends, and alternatives where Ireland punches well above its weight, we are positively positioned."
"We have a proven, world class, pro-business environment topping the EU league of business-friendly tax regimes. Along with a rich talent pool, this makes us especially attractive to global asset managers."
Asset and Wealth Management practice lead Andrew O’Callaghan said: "With over 100,000 highly skilled professionals working in financial services in Ireland, PwC is confident that Ireland has the capacity to deal with any relocation to Ireland as a result of the UK leaving the Single Market".