The focus on consolidating technology capabilities is viewed as a proactive strategy for long-term growth and sustainability in the asset and wealth management sector.

A recent report reveals that 80% of asset and wealth management organizations believe technologies like AI will enhance revenue, with a potential 12% revenue increase for those adopting 'tech-as-a-service' models by 2028.

Albertha Charles, Global Asset & Wealth Management Leader at PwC UK, emphasizes the necessity for AWM organizations to adapt to digital disruption and expand their talent and product offerings.

Asset and wealth managers are increasingly leveraging artificial intelligence (AI) to drive growth, improve competitiveness, and enhance operational efficiency.

The study surveyed 521 financial professionals, including 264 asset managers and 257 institutional investors from 29 countries and territories.

PwC forecasts a compound annual growth rate (CAGR) of 5.9% for global assets under management (AUM), with alternative investments expected to grow at a CAGR of 6.7%, reaching $27.6 trillion by 2028.

Despite the opportunities presented by disruptive technologies, over 68% of asset and wealth management organizations allocate less than 16% of their capital to innovative technologies.

AI is expected to enhance trading strategies, improve decision-making, and analyze data, providing significant opportunities for innovation and market expansion.

Market participants are focusing on consolidating and forming partnerships to establish tech-driven ecosystems, which are crucial for knowledge transfer and skill development.

The report highlights the impending 'great wealth transfer,' with trillions expected to transition to younger, tech-savvy investors who demand high levels of engagement from financial advisers.

Currently, only 18% of asset managers offer emerging asset classes like digital assets, although 80% of those that do report increased inflows.

These strategies aim to innovate, enter new markets, and democratize access to investment products in anticipation of significant wealth transfer.