Posts Tagged “IBM Institute for Business Value”

Spotlight Series: Suzanne Duncan, IBM Institute for Business Value on the Customer Trust Gap.

September 1, 2020

Suzanne Duncan, Financial Markets Industry Leader, IBM INSTITUTE FOR BUSINESS VALUE presented new research on the “Plugging the Customer Trust Gap” for the NEW FUNDFORUM 2010 KEYNOTE RESEARCH PAPER OF THE YEAR.

In an interview for the Spotlight Series, she explains the key findings of the report and recommends advice over product as a key differentiator.

Change essential for asset management industry

July 1, 2020

Suzanne Duncan speaking at FundForum International 2010

In a scary but inspiring report, Suzanne Duncan, financial markets leader for the IBM Institute for Business Value, presented the results of the largest global survey on the investor trust gap. A banking crisis is four times as bad as any other financial crisis, she said. It’s twice as deep and twice as long. Five key findings from the research were that sophistication in the fund management industry has outstripped our ability to handle it; together governments and the industry must balance stability and innovation; firms must deliver on brand promises and in order to thrive, the industry must solve its identity crisis.

Findings showed that the industry has very powerful brands and three key strengths: client centricity, flexibility and stability. However, 57 per cent of those surveyed felt that they failed to deliver. Turning to confidence, Duncan said that 70 per cent of clients interviewed felt that providers had their own interests at heart and worked at the investors’ expense and shockingly, roughly the same proportion of providers agreed with this finding. The industry is capable of change said Duncan. “Imagine if it applied the innovation and rigour it applies to its products to the clients” she said. What keeps you awake at night was the final question asked by IBM and 80 per cent reported that it was business model uncertainty. This, said Duncan, was a good thing.

She closed with two predictions. Consolidation lies in the future for the asset management industry she believes. “It is the single most fragmented part of the financial system” she said. Secondly, there would also be unbundling and the creation of more boutiques and specialist firms. “More specialised firms have superior performance” she said.

Further questioning from the audience found that clients want clear unbiased advice and there was some degree of support for performance fees being charged where possible. “One thing we really like about hedge funds is that they have skin in the game. There is a better alignment of incentives in that model” Duncan said and also reported that there is a severe trust gap between governments and the fund management industry with governments generally believing that the asset management industry was only in it for its own advancement while the asset management industry wanted to work with governments to improve its offerings.

New Directions: Building Trust and Growing Wealth in the New Economy

May 20, 2020

An Article by Suzanne Duncan, IBM Institute for Business Value.

Suzanne Duncan will be speaking at FundForum International 2010; 28 June - 2 July in Monaco

What does the fund management industry have to do to maximize returns in a heightened regulatory environment? To start, the industry must reform some of its core attitudes and practices. The majority of investment providers today have brands that promise to provide manager value, flexibility, stability, and ultimately to focus on the interests of their clients.  In practice, however, the opposite is often true.  IBM’s analysis of more than 2,700 industry participants has found that three quarters (76%) of executives believe they fail to deliver on their brand promises.  This number has grown from (67%) in late 2009 when executives were similarly polled for IBM’s study last year.

This failure to deliver brand promises has further accentuated growing levels of distrust and disconnects between investment providers (asset managers and distributors) and their clients. IBM’s research also has found that a majority of clients (nearly 70%) felt that firms are likely to offer products and services in the firm’s own best interest versus those of their clients. More disturbingly, over 60% of providers also agreed.

What are the implications of these disconnects? Trust gaps between investors and providers are hurting the provider’s bottom line, and taking away from opportunities for future innovation. These disconnects can be closed if firms start paying closer attention to investors’ shifting behaviors, attitudes and needs. IBM’s research has also found that any firm that can deliver what investors truly want will be able to charge a premium of 5% above their competitors - a significant opportunity for the industry if it can broaden their definition of innovation to focus on not only product forms - but also client forms of innovation. That is where much of the money will be made. Read more »

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