• Almost three-fourths (73%) of asset and wealth management (AWM) organisations say AI is seen as the most transformational technology over the next 2-3 years
• 81% are contemplating strategic partnerships, consolidations, or mergers and acquisitions (M&A) to enhance technological capabilities and build an ‘extended tech ecosystem’
• Global assets under management (AUM) projected by PwC to hit US$171 trillion by 2028 at a 5.9% compound annual growth rate (CAGR), with alternatives to grow quicker – at 6.7% CAGR, to reach $27.6 trillion by 2028
• AWM organisations look to tokenisation to democratise finance: PwC expects tokenised investment funds to surge to over $317 billion in 2028, at a 51% CAGR
• Skills in high demand: 73% of asset managers considering M&A see access to skilled expertise as the number one driver of deal-making over next 2-3 years, yet 30% say they lack relevant skills and talent

LONDON, Nov. 19, 2024 /PRNewswire/ — Four-fifths (80%) of asset and wealth management (AWM) organisations say disruptive technologies such as AI will fuel revenue growth, with those moving quickly to adopt ‘tech-as-a-service’ potentially seeing a 12% boost to revenues by 2028, according to PwC analysis.

PwC’s 2024 Asset & Wealth Management Report, released today, surveyed 264 asset managers and 257 institutional investors from across 28 countries and territories, and also finds that four-fifths (81%) are contemplating strategic partnerships, consolidations, or mergers and acquisitions in order to enhance technological capabilities and build an ‘extended tech ecosystem’ to innovate, expand into new markets, and democratise access to investment products ahead of a great wealth transfer.

The report also finds that global AUM held by AWM organisations around the world is projected by PwC to hit US$171 trillion by 2028, with tokenised investment funds to surge at a CAGR of 51%.

Albertha Charles, Global Asset & Wealth Management Leader, PwC UK, said:

“Disruptive technologies such as AI are transforming the asset and wealth management industry and fuelling revenue growth, productivity and efficiency. Market players are subsequently looking to strategic consolidation and partnerships to build tech-driven ecosystems, break down silos in data management, and transform their service offerings ahead of a great wealth transfer that will see mass affluents and younger audiences play a greater role in shaping service demands. To emerge as leaders in this new digital-first market, AWM organisations must invest in their technological transformation while also ensuring they are re-skilling and upskilling their workforces with the necessary digital capabilities to remain competitive and innovative.”

Disruptive technologies will fuel AWM revenue growth

AWM organisations broadly see disruptive technologies such as AI as transformational, with almost three-fourths (73%) viewing it as the most transformative technology over the next two to three years. 80% say such technologies will fuel revenue growth, with 84% noting it will improve operational efficiency and 72% noting it will improve employee productivity. The provision of tech-as-a-service¹ by AMW organisations could deliver a 12% boost to revenues by 2028, according to PwC analysis.

While such technologies represent an opportunity to turbo-charge operations and access new markets, more than three-fifths (68%) say that they allocate less than one-sixth of their capital to innovative and potentially transformative technologies, with more than half (59%) of institutional investors noting such technologies could reduce their reliance on asset managers. This comes as only 20% of AWM organisations are currently using disruptive tech to enhance personalised investment advisory.

Global AUM to hit US$171 trillion by 2028, with alternatives leading the way

Under baseline projections, PwC research estimates global assets under management (AUM) held by asset and wealth managers (AWMs) is expected to hit US$171 trillion by 2028, reflecting a 5.9% CAGR, and up from 5% last year. Alternatives are projected to grow much faster – at a CAGR of 6.7%, to reach $27.6 trillion by 2028.

As AWM organisations look to new growth opportunities, tokenisation stands out, with tokenised investment funds expected by PwC to increase from $40 billion to over $317 billion in 2028, representing a 51% CAGR. Tokenisation, or fractional ownership,² could expand market offerings by democratising finance and lowering premiums, with tokenisation planned to be offered notably by asset managers in private equity (53%), equity (46%), and hedge funds (44%). While alternatives represent a significant growth opportunity, less than one-fifth (18%) currently offer emerging asset classes such as digital assets as part of their offering – even as eight in ten that do offer such assets report a rise in inflows.

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AWM looks to consolidation and tech ecosystems as talent remains top priority

Against this backdrop, 30% of asset managers say they are currently facing a lack of relevant skills and talent, while 73% of AWM organisations who are exploring M&A see access to skilled expertise as the number one driver for deal-making over the next 2-3 years. As AWM organisations contend with digital disruption and expanding their talent and product pools, more than four-fifths (81%) are contemplating strategic partnerships, consolidations, or mergers and acquisitions to build an extended tech ecosystem to drive growth.

Albertha Charles, Global Asset & Wealth Management Leader, PwC UK, concludes:

“The report highlights an urgent need for AWM organisations to rethink investment strategies. Long-term viability depends on a radical, fundamental and continuous reinvention of how organisations create and deliver value. 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.”

About PwC 2024 Asset & Wealth Management Report

PwC’s 2024 Asset & Wealth Management Report is an international survey of 264 asset managers and 257 institutional investors from across 28 countries and territories. Respondents covered a broad spectrum of AUM size, with more than half boasting assets of over US$10 billion. You can read the full report at www.pwc.com

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 149 countries with more than 370,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

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¹ Tech-as-a-service includes ‘platforms for product distribution, portfolio management, risk and data analytics, and more.’ More broadly it is a model that allows third parties to offer financial services by using the technology and regulatory framework of traditional financial institutions.
² Tokenisation is the digitisation of an asset where each unit or token represents ownership of part of that asset. It converts rights to an asset into a form of digital token facilitated by a blockchain platform.

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BAKU, Azerbaijan, Nov. 19, 2024 /PRNewswire/ — On November 14-15, 2024, Dr. Ma Jun, Co-Chair of the IPSF Taxonomy Working Group and Chairman of Capacity-building Alliance of Sustainable Investment (CASI), presented at several sustainable finance sessions during COP29, elaborated on the Multi-Jurisdiction Common Taxonomy (MCGT). He points out that the MCGT launch marks a significant milestone in enhancing the interoperability of taxonomies across jurisdictions and facilitating cross-border green capital flows. 

At the session hosted by the International Platform on Sustainable Finance (IPSF), Dr. Ma elaborated on the key considerations of the international effort to develop a “common language” for identifying and labelling green and sustainable activities, with a view to mitigating the risk of market segmentation and transaction costs due to proliferation of taxonomies by different jurisdictions. During 2020-2022, the IPSF Taxonomy Working Group, Co-chaired by China and the EU, published the Common Ground Taxonomy (CGT) that included 72 climate mitigation activities recognized by both economies. Since its release in 2022, the CGT has been used by issuers in China to label green finance products traded internationally and domestically, which helped reduce costs for cross-border transactions.

In 2023, Singapore joined the CGT exercise, and collaborated with the EU and China to produce the Multi-jurisdiction Common Ground Taxonomy (MCGT), featuring 110 mitigation activities agreed upon by the three jurisdictions. Dr. Ma believes the MCGT represents “an important new milestone for enhancing interoperability of taxonomies across jurisdictions.” The fact that CGT has been used by several jurisdictions as a building block for taxonomy development, suggests that the MCGT could further aid other countries in developing their sustainable finance markets.

In sessions hosted by Spain and Kazakhstan, Dr. Ma discussed the key uses of taxonomies, including labelling green financial products, preventing greenwashing, measuring and reporting green performance, and allocating policy incentives to green performers. He emphasised that the MCGT could serve as reference for more jurisdictions in developing their domestic taxonomies.

During the CASI Sustainability Forum for COP29 co-hosted by the Capacity-building Alliance of Sustainable Investment (CASI) and Azerbaijan University of Economics (UNEC), Dr. Ma stated that to enhance its global role in boosting interoperability of taxonomies, the MCGT plans to “expand its jurisdictional coverage by inviting more countries to join the development of future versions of MCGT.”

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LONDON, Nov. 19, 2024 /PRNewswire/ — DeFinity Markets®, the first full-stack institutional digital asset matching and settlement platform for fiat and digital assets, is thrilled to announce their integration of Chainalysis, the blockchain data platform. This marks a pivotal moment for DeFinity Markets’ risk management and compliance capabilities.

Chainalysis enjoys international acclaim for its blockchain analytics and data offerings, software, and services. Serving a diverse clientele spanning government agencies, cryptocurrency exchanges, financial institutions, insurance providers, and cybersecurity firms across more than 70 countries, Chainalysis has been instrumental in solving high-profile criminal cases and enhancing secure consumer access to digital assets.

By seamlessly integrating KYT, the real-time transaction monitoring solution by Chainalysis, into its platform, DeFinity Markets is committed to equipping its compliance team with robust risk management tools. This integration is set to bolster transparency and fortify security within the digital asset landscape, aligning with DeFinity’s unwavering dedication to fostering equitable and transparent trading practices.

DeFinity clients have the privilege of utilising Chainalysis’ compliance solutions, enabling real-time monitoring and assessment of digital asset transactions to ensure strict adherence to regulatory protocols.

Chainalysis’ cutting-edge technology augments DeFinity’s security architecture, which provides a fortified shield for user data and assets against potential threats and vulnerabilities.

DeFinity’s unwavering commitment to nurturing trust and transparency in the digital asset realm is an imperative facet for institutional investors.

In expressing enthusiasm about this collaboration, Chris Park, Chief Risk Officer at DeFinity Markets, remarked, “We are thrilled to bring cutting-edge compliance solutions to our users operating within the dynamic digital asset market. This integration seamlessly aligns with our mission to provide transparency and security to our esteemed institutional clients. With the wealth of expertise that Chainalysis brings to the table, we are poised to strengthen our position as the preeminent venue for institutional Digital Asset traders.”

Alex Cable, VP North EMEA, Chainalysis: “In today’s dynamic cryptocurrency landscape, trust and security are paramount. DeFinity Markets is on a mission to uphold high standards of compliance and risk management. By leveraging blockchain’s inherent transparency, they are able to provide a secure and reliable platform for their clients.”

About Chainalysis
Chainalysis is the blockchain data platform, making it easy to connect the movement of digital assets to real-world services. Organizations can investigate illicit activity, manage risk exposure, and develop innovative market solutions with deep blockchain data insights. Our mission is to build trust in blockchains, blending safety and security with an unwavering commitment to growth and innovation.

For more information, visit www.chainalysis.com.

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About DeFinity Markets
DeFinity Markets® is the Institutional Standard in Digital Assets Trading and fiat rails. DeFinity is built on institutional-grade technology offering unprecedented digital assets market access to globally leading Financial Institutions seeking to diversify their portfolio. The DeFinity management team has applied decades of knowledge of traditional financial markets to create the DeFinity ECN with direct market access. Platform participants can transact fiat FX trades with the digital asset’s component completed on the DeFinity ECN. The ECN is custody-agnostic and provides FIX API access, a standardized rulebook powered by an embedded AML/KYC framework. We aggregate quotes from market makers on which qualified clients can transact digital assets. DeFinity offers access to liquidity across all major digital assets, including stable coins. The DeFinity ECN supports fiat currencies including GBP, EUR, USD crosses supported by an integrated fiat on and off-ramp gateway.

For further information, please visit: www.DeFinitymarkets.com.

Contact
Media Room DeFinity Markets
[email protected] 

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