Deloitte Luxembourg has published its annual Asset Servicers Survey of players of the European investment management industry, providing a holistic view of today’s market needs, challenges and developments, as well as an outlook on asset servicing.

The results of the survey revealed five major challenges that profoundly impacted the entire investment management value chain.

To meet the needs of their clients, asset servicers must embrace innovation to improve their operational efficiency and develop better competencies in data management.

Investors’ increasing appetite for investments that fulfill environmental, social and governance (ESG) criteria requires asset servicers to go beyond their existing capabilities.

New operating models may require a thorough reconsideration of outsourced and offshored activities.

Alternative investments are following a structural upward trend; therefore, servicers must expand and renew their service offering and areas of competence.

Because of the global pandemic, businesses in all industries, including investment management, have had to improvise to overcome obstacles unimaginable a year ago.

“Mounting fee pressures, innovative product development, expanding regulations, an unstable macroeconomic background and the COVID-19 outbreak have disrupted both the asset servicing and asset management sectors. Asset servicers have to adapt and react to this unpredictable environment—so far, the industry has proved its resilience and proceeds with confidence toward what lies ahead,” commented Vincent Gouverneur, Partner and EMEA Investment Management Leader.

Towards a more digital service offering

According to the survey, digital and customization are key requirements of investors. Investors’ top two expectations are access to a portfolio of real-time digital support, according to 80% of asset servicers, followed by a seamless customized investment experience, according to 70% of asset servicers.

Consequently, digital capabilities are becoming increasingly essential for asset managers. Forty percent of asset servicers consider digital capabilities to be one of the top three criteria that asset managers consider when selecting asset servicers.

As a result, asset servicers are adapting their development plans to propose more end-to-end digital solutions, either through outsourcing services or as self-service solutions, giving accessibility and autonomy to asset managers regarding their data and processes.

Sustainability and ESG—The challenging rising star?

Mainly driven by the expanding regulatory framework, most asset servicers have started integrating ESG into their offering, which is affecting their business models. The survey shows that asset servicers have a growing interest in sustainability topics, with 100% of asset servicers planning to integrate sustainability criteria into their own business processes in the next three years. The emergence of a sustainable finance regulatory framework is one of the main drivers, with 78% of asset servicers expecting ESG compliance to play a significant role in their strategy development.

About the Deloitte Asset Servicers Survey

Organized jointly by Deloitte Ireland and Deloitte Luxembourg, the latest edition of the Asset Servicers Survey canvassed 10 major global players located in Europe and the US, with a combined €74 trillion assets under custody (AuC); i.e., approximately 50% of the global amount. The participants are global players from various countries of origin that provide a wide range of services to their clients. These include fund administration services, transfer agency services, management services, and various ancillary services that are relevant to asset managers and final investors.

To read the Deloitte Asset Servicers Survey in full, please go to: https://www.deloitte.com/lu/asset-servicers-survey