Asset Managers’ Tech Spending Fails to Boost Productivity, McKinsey Reports
Technology investments in asset management have surged without delivering proportional productivity gains, according to McKinsey research. Operating margins declined 3% in North America and 5% in Europe from 2019-2023 as costs grew faster than revenues.
Tech spending ballooned at an 8.9% annual rate across major markets, yet showed no clear correlation with improved efficiency metrics. The consultancy found no evidence that higher budgets translated to better cost-to-AUM ratios or revenue per employee.
"The data reveals a troubling disconnect," the report states, noting the industry's "sticky" costs and unpredictable revenue streams. Asset managers now face mounting pressure to demonstrate tangible returns on their digital transformation initiatives.
