Many fund professionals’ first instinct to the idea of robots and automated solutions infiltrating their industry may be to push back against the approaching tide of technological innovation.
Technology’s increasingly central role to many asset management functions has created frictions in some part of the industry, with French investment house Amundi warning recently that technological innovations could have “adverse implications” on fund jobs.
But experts are advising asset management professionals to embrace the application of technology and focus on adapting to the new digital-focused workplace if they want to stay relevant.
Irshaad Ahmad, head of institutional Europe at Allianz Global Investors, says: “Rather than wishing and hoping [it will not happen], the sooner you accept [that technological progress] is a certainty the better.”
Hector McNeil, co-chief executive officer of HanETF, agrees that it is pointless for asset management professionals “to put their finger in the dyke” and resist the advancing tide of technology.
Instead fund professionals need to act now in order to obtain the new skills they will need to fit into this new way of working, says Mr Ahmad.
Here are five skills that will help robot proof your career.
Traditionally the fund industry has relied to a large extent on humanities and economics graduates when recruiting new talent.
However, the rise of technology is prompting the industry to “embrace engineers, statisticians and computer scientists” in the place of its traditional recruit base, says Michael Kollo, chief research strategist for Axa Investment Managers’ Rosenberg Equities fund.
Although this trend has been underway for a number of years, Mr Kollo says he expects “continued pressure for incumbents to pick up and extend their data comfort levels”.
He says that in future asset management staff will need to be more “quant literate” and “comfortable with alternate ways of looking at portfolios, risk and sources of investment information”.
Mr Kollo adds: “Being comfortable with the quantification of investment management is the primary goal.
“You don’t need a PhD in statistics, but there are plenty of free and paid online courses to bring people up to speed with basic data analysis techniques and, more importantly, make them more comfortable in these areas.”
This is likely to come in handy as more fund houses incorporate machine learning and artificial intelligence techniques across their businesses.
As technology disrupts ways of working, the asset management industry will increasingly need a different calibre of leader, says Claire Logan, head of people and talent at PA Consulting Group.
She says technology-centric working will require “leaders who truly understand digital technologies, opportunities and threats”.
People who are “willing and able to create a compelling vision of the future workplace, [and to] inspire and lead others to want to be part of it” will be highly sought-after, she says.
Despite the greater emphasis on technical skills, Ben Lucas, partner in the financial services practice at EY, says behavioural skills should not be forgotten about.
Mr Lucas says: “It is widely accepted that emotional intelligence will become increasingly important in a more automated digital world as each human interaction takes on more significance and is focused on the higher-value tasks.”
He adds: “The great news for us as humans is that unlike IQ, which is widely considered to be fixed, EQ, while firm, can be developed.”
According to Mr Lucas, fund professionals “can significantly improve their EQ and thus the opportunities available to them” if they receive the right coaching and feedback.
Ms Logan says people who can demonstrate skill in change management and relationship building will excel in the workplace of the future.
Clare Flynn Levy, CEO of Essentia Analytics, says employees who do not have technical minds should not fear being left behind by the digital wave, especially if they have strong communication skills.
She says: “Volunteer to write about it, in the context of your role, or to do marketing presentations.
“Make yourself a visible representative of the future of investment management.”
Ms Flynn Levy adds that individuals with strong interpersonal skills could also seek to “bridge the gap between quants and human portfolio managers”, which are “often different enough philosophically to not bother with each other”.
She suggests “finding reasons to mix with the other side” and seeking to be “part of the solution rather than the problem”.
Angelique Schouten, CEO of Ohpen UK, adds that communication skills are often integral to the use of technology. She says that communication specialists who can “translate data-driven information into policies and actions” will be increasingly in demand.
She also points to the importance of data visualisation skills, and the need for people who can present data “in such a way that everyone, from the board room to the customer service centers, can understand and use it to make better business decisions”.
It should go without saying that fund employees need to hone their IT skills if they want to fit into the new technology-centric workplace.
Becoming familiar with programming is a good place to start, says Ms Schouten.
Ms Schouten advises professionals to become familiar with programming languages R and Python.
She also recommends staff to learn to use big data analysis tools such as NoSQL, MapReduce and Hadoop to anticipate the trend for fund firms to mine huge pools of information to extract insights.
Egbert Nijmeijer, a senior portfolio manager at Kempen Capital Management, says IT has become central to what investment professionals do since he began his career 17 years ago.
He says: “If you’re a portfolio manager today you better become specialised in IT or you’re lost.”
Six years ago Kempen placed digitialisation at the centre of its real estate investment process, which prompted Mr Nijmeijer’s team to recruit investment professionals with programming and data analytics skills for the first time.
“We made a strategic choice to create a team [with] the skill sets that would allow us to process and inventorise large amounts of data,” says Mr Nijmeijer.
The team now includes an R programmer, while the other investment professionals have been trained to understand the “basics” of code in order to allow the team to work seamlessly together.
The team has also become familiar with Alteryx, a tool that helps to process data, which Mr Nijmeijer describes as “Excel on steroids”.
“A lot of these new software tools have come up in the past five years,” he says.
He advises fund professionals to educate themselves, and to “try and keep up to date” with the latest innovations.
But do not forget sector-specific skills
However, fund professionals should not get distracted by technology to the extent that they underestimate knowledge of their industry and company, says Ms Schouten.
“An asset manager supported by data will always be a better asset manager [employing] a data scientist without industry knowledge.”