Rebooting the global asset management industry

Rebooting the global asset management industry 15 Theme 4: IncrementalismWill Likely Define Future Progress Historically, the adoption pace of a promising new technology – with little track record of commercial success – was slower due to the fear of the unknown. However, over time, this has been replaced by the fear of missing out, as competitive dynamics are reshaped by early adopters who become price makers, with their strong moats, strong brands and compelling value propositions. It is hard to predict that tipping point in the asset management industry other than to say that the direction of travel is clear, albeit at a variable pace (Figure 1.4, left chart): some are moving slowly (24%); some making a good start (33%); some are moving at an acceptable pace (36%); and some are advancing very rapidly (7%). Another historical lesson is that adoption tends to be more evolutionary despite the technology’s potential, but its eventual impact is more revolutionary than expected, as shown by history of the internet. Progress towards a digital future where AI and GenAI permeate every activity in the investment value chain will likely continue. What seems like incremental steps nowmay well create monumental impacts in future. Such incrementalism is also evident in the extent of upskilling in the current workforce, since AI and GenAI are not just a tech play but a people play too (Figure 1.4, right chart). Some have not started upskilling (17%), some are doing it selectively (53%), some are covering entire teams (18%), and some are covering the entire business (12%). A significant proportion of asset managers’ current technology-based work processes remain reliant on constant human intervention, with technology used as a supportive tool, not a direct replacement of humans. AI and GenAI agents and humans work collaboratively when making decisions. Over time, agents may gain greater autonomy and cause a ‘digital flip,’ in which the winners move to entirely different operating models, with GenAI doing much of the heavy lifting. Whether regulators will allow that eventuality seems highly unlikely – for now. When Heraclitus philosophized that change was the only constant, he did not envision the disruptive power of GenAI. What seems like incremental steps nowmay well create monumental impacts in future. Figure 1.4 At what pace is your organization now progressing towards a digital future? Is your business upskilling the current workforce so as to reap maximum benefit from investment in AI and GenAI? Source: Citi/CREATE-Research Survey 2025 Very slowly Made a good start Advancing at an acceptable pace Advancing rapidly No Yes, selectively Yes, covering entire teams Yes, covering entire business 7 17 24 53 33 18 12 36 % of respondents % of respondents “In the past, we have invariably overestimated the speed of technology adoption and underestimated its eventual impact.” “The new human–machine interface will create its own version of star culture, as tech talent commands a premium.” Interview Quotes