4 Physical asset management trends for 2023

As we enter 2022, the physical asset management industry has reached a record value of 126 billion dollars. The continued volatility of the market has spooked many investors. However, the sector has grown for the third consecutive year, suggesting that there are still plenty of opportunities for those who know where to look.

Physical asset management companies are turning to innovative data strategies, new forms of reporting and disclosure, and a greater focus on digital transformation. On the other hand, they are also preparing to face a series of widespread changes driven by a greater focus on ESG transparency, better industry accessibility, greater personalization.

To this end, I have identified 4 trends that will impact the Asset Management industry in 2023.

1. Strong data-driven strategy

Managers are turning to advanced analytics and machine learning technologies to help them analyze data. This allows them to keep up with the competition, better understand their customers and their behaviors, and make data-driven decisions that can improve performance and results.

2. ESG reports

Sustainability is no longer a niche concern; it cuts across all sectors of today's organizational ecosystem. Investors want to know more than ever that their money is being invested in companies and industries that are committed to having a positive impact on the environment and society. This is because ESG (environmental, social and governance) reporting has become mandatory for listed companies and physical asset managers are following suit, providing greater transparency and evidence around ESG in their client portfolios.

Stakeholders ultimately want companies to be genuine about their actions and the progress they are making. Greenwashing and general dishonesty about environmental, social and corporate governance (ESG) issues could put companies in a risky position, potentially losing customers and reducing access to finance.

Almost 8 out of 10 millennial investors consider the environment, social and governance issues to be their top priority when considering investment opportunities. In fact, they consider ESG to be more important than returns themselves.

3. Digital transformation

Physical asset managers are increasingly focused on digital transformation. This means automating manual processes, adopting artificial intelligence (AI), and using cloud-based technologies to improve efficiency and compliance. Digital transformation is not a new concept, but the

The pandemic has pushed it to the top of the agenda for the vast majority of physical asset management companies. The need to support remote working arrangements and meet the growing demands of digitally savvy investors has meant that companies have had to invest in digital transformation at an accelerated pace.

4. Talent retention strategies

In the information technology industry, companies are struggling to retain their talent and physical asset management companies are no exception. The excellent working conditions that fintech companies and other financial services organizations offer potential employees is proving extremely difficult for physical asset managers to compete with.

To combat these conditions, physical asset managers are turning to more agile working models, offering greater flexibility with regard to working hours and locations. They are also looking for ways to improve work/life balance and offer more opportunities for professional development.

Society is evolving and changing at breakneck speed, so it is essential for physical asset management companies to keep abreast of the latest trends so that they are in a position to adapt quickly to new market realities and the needs of their clients, so as not to be overtaken by the competition.

Source: Diário de Notícias

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