May 30, 2024
Not only to survive, but to thrive: CIOs’ priorities for success in 2024
Senior Marketing Content Creator
Reading time: 2 min
OWINTALK | BEHIND BUSINESS, BEYOND NEWS
The investment services industry is currently grappling with well-known challenges, further exacerbated by stagnant productivity rooted in toutdated business models and the persistent hurdles posed by legacy technology. Moving forward, the firms that will thrive are therefore those that effectively manage costs, swiftly adapt to emerging opportunities, and leverage powerful forces like AI. For CIOs the priority is clear: focus on IT initiatives that significantly boost productivity.
In this scenario, we feel Gartner® underscores the importance of cost management:
“Managing cost is essential, with industry cost to income ratio (CIRs) having risen to over 70% across asset and wealth management, and across firm size. Technology spent as a part of total operating expense has risen to 15% in 2022 from 13% five years earlier. The CIO’s top priority will enhance IT productivity, while managing cost and navigating through this constant uncertainty and volatility.”
Also, in this unpredictable landscape, CIOs and technology leaders must proactively anticipate and respond to disruptions. Resilience—marked by the ability to navigate crises with agility and adapt to constant change—will be key to success, all while maintaining a focus on business goals.
Finally, according to Gartner, harnessing mega forces like AI is crucial. CIOs must champion cultural shifts within their organizations to drive innovation and prepare for the future. They are “uniquely positioned to enable fundamental changes in the operating model through digitalization and tautomation, as well as new growth through technology enablement.”
- Optimization Practices
As attested by Gartner research, “Through 2026, 50% of CIOs will implement optimization practices by cutting underperforming initiatives to accelerate strategic projects, improving IT productivity by over two times.”
- Advisor Platforms
Gartner highlights that “By 2026, 75% of wealth management firms will deploy all-in-one advisor desktop platforms and increase advisory productivity by at least 25%”. These platforms will streamline advisor workflows and provide advanced analytical capabilities to meet client expectations.
- AI in Training
With the average age of investment advisors now at 56, wealth management firms must prepare for the departure of these experienced professionals. According to Gartner, “By 2027, 70% of wealth management firms will delegate advisor training and development to a training AI assistant, reducing time to full productivity by 50%.” These AI tools will expedite the training process through content summarization and adaptive learning techniques.
- Data Ecosystems
“By 2025, 50% of investment firms will adopt data ecosystems to automate the data life cycle from discovery to delivery, reducing cost of attaining and managing data by 40%”, says Gartner. These ecosystems will provide access to a wide range of datasets, including ESG and alternative data.
- Hybrid Advice Models:
“By 2026, 60% of wealth management firms will have developed hybrid advice capabilities, closing the gap between self-directed and traditional advice, and increasing profitability by 25%”. On the client side, this allows customers to choose which tasks they prefer to handle independently and when they wish to collaborate with their trusted advisor. On the advisor side, this hybrid digital advice model empowers them to foresee or predict these moments of contemplation.
In conclusion, the future success of the investment services industry hinges on the ability to manage costs, leverage technological advancements, and maintain agility in the face of disruption. CIOs and technology leaders will play a crucial role in guiding their organizations through these challenges, ensuring they are well-positioned to capitalize on new opportunities and drive sustained growth.
This and much more is explored in the @Gartner® Predicts 2024: Investment Management Drives Productivity Amid Uncertainty.
Get immediate access to the Gartner® report! Objectway offers you a complimentary copy.
Gartner, Predicts 2024: Investment Management Drives Productivity Amid Uncertainty, Ali Merji, Chuck Thomas, 19 March 2024.
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
