Asset Managers Face a New Economic Reality
If you’ve been in asset management lately, you know something’s shifted. It’s not just the usual market volatility, the entire economics of running an asset management firm has changed. Rising interest rates, slowing global growth, and heightened regulatory pressures are all reshaping the economics of the industry. According to McKinsey, these macro shifts are forcing firms to rethink their operating models and technology investments to achieve potential cost reductions of 20-40%.
To stay competitive, firms must do more than cut costs—they need to modernize the middle and back office. That’s why AI and SaaS-based automation are fast becoming strategic priorities for forward-thinking asset managers.
Why Asset Management Technology Spend Isn’t Driving Productivity
Many financial services firms are increasing their technology budgets. Yet operational productivity hasn’t kept pace. Legacy infrastructure, fragmented systems, and manual workflows are driving up costs without delivering proportional gains. According to data from AutoRek, 79% of asset management and capital markets firms say their reconciliation processes are already struggling to keep up with current data volumes.
Operations teams often adapt to their tools, rather than using tools that are built for agility and scale. This misalignment leads to inefficiencies and bottlenecks in critical processes like reconciliation, reporting, and data validation.
Legacy Systems Are Holding Firms Back
On-premise and traditional systems may still function, but they come with hidden costs. These include:
- Ongoing maintenance and support overhead
- Inflexible workflows that are hard to adapt
- Dependence on specialist skills or manual intervention
- Poor integration with modern data sources
As asset managers pursue scale, agility, and real-time compliance, these outdated systems become a significant barrier.
SaaS for Reconciliation: The First Step Toward AI Readiness
Cloud-based platforms offer a more scalable and cost-efficient way to manage core operational processes. At AutoRek, we help financial services firms automate and control complex data workflows, including:
- Ingesting and validating large volumes of financial data
- Achieving 95%+ match rates to minimise exceptions
- Meeting regulatory compliance across CASS, EMIR, MiFID II, and more
- Delivering real-time reporting and operational oversight
By transitioning to SaaS-based reconciliation software, firms not only reduce operational costs—they also lay the foundation for more advanced capabilities, including AI.
The AI Opportunity in Financial Operations
Artificial intelligence is poised to unlock new levels of efficiency and insight across the financial services value chain. While AI is often discussed in the context of trading or customer engagement, its most immediate and scalable value may lie in operational use cases.
Examples include:
- Intelligent exception categorisation and prioritisation
- Pattern recognition across high-volume reconciliation workflows
- Anomaly detection and risk flagging
- Predictive operational analytics
At AutoRek, we are actively investing in this space. While our AI-powered capabilities are still in development, we’re working closely with clients to ensure the solutions we bring to market solve real operational pain points. Our vision is clear: AI will not replace foundational automation—it will enhance it.
Aligning Technology and Operations for Scalable Impact
Adopting AI in asset management requires strategic alignment across technology and operations teams. CTOs, CIOs, and COOs must collaborate to:
- Identify high-value processes for AI-driven automation
- Build agile, cloud-based infrastructures
- Ensure compliance, scalability, and cost control remain central to operations
Firms that take a siloed approach risk missing the opportunity to unlock genuine operational alpha—an increasingly important source of competitive advantage in today’s market.
Conclusion: The Future of Reconciliation Is Intelligent, Automated, and AI-Ready
In a landscape where fee pressure and regulatory complexity continue to rise, operational excellence is no longer optional. By embracing SaaS platforms today and preparing for AI-powered reconciliation tomorrow, asset managers can protect margins, reduce risk, and scale with confidence.
AutoRek is proud to be supporting firms on this journey. We’re enabling intelligent automation today—and building the AI-powered future of financial operations.