Investment Management Market to Grow at 11.3% CAGR, as Uncertainty in and Rising Efficacy of Machine Learning to Drive Growth

Investment Management Market to Grow at 11.3% CAGR, as Uncertainty in and Rising Efficacy of Machine Learning to Drive Growth

08 April, 2021, New York, USA – According to the United Nations Conference on Trade and Development (UNCSTAD), the global foreign investment in 2020 reached $859 billion. The growing interest in emerging regions, with about 72% funding accounted for in emerging countries remains a promising outlook for players in the investment management market. The investment management solutions, with advancements in supporting technologies like automation, and machine learning can provide more reliable forecasts for global investors. Furthermore, growing consumer surveys also point to increased confidence in technologies like machine learning. Furthermore, according to the UNCSTAD, high-tech industry, and cross-border collaboration, along with ICT and pharmaceutical industry remained immune to the bleak outlook in economies reinstating faith in the next-gen technologies like machine learning, automation, and growth for the investment management market for the future. According to the UNCSTAD, countries like China witnessed an increase of 4% in FDI, while high-tech industry witnessed growth of 11%, while cross-border M&A in pharmaceutical and ICT industry rose by whopping 54% in 2020. Growing transnational collaborations, increased opportunities in the high-tech industry, and increased FDI in manufacturing base like China remain a promising positive outlook for growth in the investment management market during the 2021-2028 period.

The investment management market, or the wealth management market was valued at nearly $2 billion in 2016. The market was projected to grow USD to over USD 10 billion by 2028, thanks to rising demand for advanced software solutions in the high-tech industry.

Human Advisory Will Continue Its Robust Growth as New Channels Reduce Distribution Costs

Distribution costs to reach a new consume base, and limited access to potential consumers remained a major challenge in the developing world earlier. With rising adoption of digitalization, and subsequent significant decrease in distribution costs has become a game changer for new players in the investment management market. The reduction in distribution costs through online platforms, and potential to reach a global audience has brought major returns for established financial institutions. Furthermore, the growing interest in investment among young people, and increased diminishing savings in emerging countries through conventional means remains an optimistic path to future growth for players in the investment management market. Among the various advisory channels, the human advisory remains an important growth channel as increased investment in uncertain arenas like high-tech, limited knowledge of financing among traditional communities, and growing demand for safe investments amidst the global financial climate will drive major growth for players in the investment management market. The market also promises robust growth for robo advisory, as growing demand for on-demand support, increased growth in subscription-models for avenues like day-trading, and hybrid model support will promise robust growth for robo advisory in the near future. The increased efficacy of these products with increased awareness about robotic technical troubleshooting, increased AI participating through personal assistants on smart devices, and increased efficacy of machine learning remain key drivers of future growth in the investment management market.

Reporting Will Likely Remain Key Demand Driver During the 2021-2028 Period

Among various business function, the reporting will remain key demand driver despite tremendous promise of portfolio management, accounting, and trading management. The reporting becomes an increasingly useful as large businesses operate in an increasingly global business landscape, and small businesses leverage technologies like cloud to save operational costs. Furthermore, technologies like cloud also provide a store management for the safety of long-term data management, and avert potential tragedies like natural disasters to ensure safekeeping for reporting services on a regular basis. The easy-to-manage nature of reporting services, increased competition in the arena, and growing demand for investment management solutions from individuals will likely remain a key driver of growth in the investment management market.

Apart from reporting, the trading management, and portfolio management will also remain key to growth in the investment management market. For example, the trading management has become essential for individuals with increased exposure to global financial systems, and increased access to information through digitalization. The day-trading has become the go-to option for increasing wealth, as individuals engage in risk-taking behaviour, with commission fees evaporating to make way for increased demand for wealth management in the global investment management market.

Cloud Technology to Remain Key Deployment Model

The migration to cloud has become the go-to management solution for large, and small players alike. This solution has been adopted by major financial institutions despite initial concerns that can lead to leakage of data. Today, major global banks are engaging in cloud migration as prospect of automation, reaching a global consume base, and reduction in distribution costs remain key drivers for migration. Furthermore, the increased engagement of young people through mobile devices, and increased demand for online support amongst the millennial generation also remain key to driving growth in the investment management market. The on premise technology deployment also remains important for some. However, the management of datacentres, the increased costs, limited technical expertise, and growing concerns such as energy management will likely make it a specialised solution for global giants, while small, and largest players continue to engage in positive adoption of cloud technology during the 2021-2028 period.

North America Likely to Dominate Global Revenues as Innovation Remains Key

The increased investment in emerging countries from the north America region, the establishment of large technology companies, and continuing innovation in software development will remain key for growth in the investment management market. The north America region held the highest total revenue share in 2020, and the region will likely remain on top, while China may overtake it in total investments in the same period. The growing FDIs in China, and Asia Pacific in general will remain key opportunities for global players in the investment management market. The increased investment in emerging nations, and significant manufacturing base in Asia pacific, along with rise in sectors like pharmaceuticals will drive highest CAGR-driven growth in APAC region during the forecast period.

The Investment Management Market Report is Segmented as Follows:

By Advisory Model

  • Human advisory
  • Robo advisory
  • Hybrid

By Business Function

  • Financial advice management
  • Portfolio, accounting, and trading management
  • Performance management
  • Risk and compliance management
  • Reporting
  • Others (billing and benchmarking)

By Deployment Model

  • Cloud
  • On-premises

By End-User Industry

  • Banks
  • Investment management firms
  • Trading and exchange firms
  • Brokerage firms
  • Others (asset management firms, and custody and compliance providers)

By Region

  • North America
    • US
    • Canada
  • Europe
    • Germany
    • Italy
    • UK
    • Rest of Europe
  • APAC
    • China
    • Japan
    • India
    • Rest of APAC
  • MEA
    • Middle East
    • Africa
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America

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