Cost pressures meet complexity – the efficiency imperative for asset managers

Efficiency Is no longer optional—It’s existential 

In today’s asset management environment, the race is no longer just about returns—it’s about resilience. 

Markets are uncertain. Margins are under pressure. Operations are overloaded. Regulation is relentless. And in a climate were doing more with less is the new mandate, efficiency has emerged as a board-level concern. 

For years, asset managers could absorb operational bloat thanks to market performance and rising AUM. But 2024 changed that narrative. Most firms saw revenue growth come almost entirely from favourable markets—not from new clients. At the same time, costs—particularly those related to compliance, data, and digitalisation—continue to rise. 

In short, asset managers are being squeezed from both ends. And they’re running out of room to manoeuvre. 

The silent killer: Operational complexity 

Let’s call it what it is: most firms are operating with too much internal friction. Over time, asset managers have accumulated layer upon layer of systems, vendors, and processes—each solving a short-term problem but contributing to long-term complexity. The result? 

• Duplicated functions across regions and teams 
• Data stored in incompatible formats across platforms 
• Manual handoffs and rework embedded into workflows 
• Difficulty scaling without hiring more headcount 

This fragmented architecture creates a perfect storm: higher costs, slower decision-making, inconsistent outputs, and greater regulatory risk. As firms expand into private markets, ESG-aligned products, and new jurisdictions, the inefficiencies only multiply. 

The numbers don’t lie 

A 2024 global operations survey of 57 asset managers revealed that: 

• 72% rank operational efficiency as a top three strategic priority 
• 77% of large firms (>£200bn AUM) are actively pursuing cost optimisation programs 
• 43% say they are currently limited by legacy tech when trying to scale operations 

This isn’t theoretical. It’s happening right now—and those who act first will have the edge. 

Efficiency is about focus, not just frugality 

It’s a common misconception that “efficiency” means cutting costs. In reality, it means refocusing resources on the areas that create true value—for clients, for investors, and for long-term competitiveness. 

Efficiency is about answering critical questions: 

1. What processes must we keep in-house? 
2. What can we automate, eliminate, or consolidate? 
3. Where can technology replace repetition? 
4. Where are we solving the same problem multiple times? 

Put differently, every pound spent on inefficiency is one not spent on innovation, client engagement, or growth. 

What leading firms are doing differently 

Forward-thinking asset managers aren’t just trimming fat. They’re redesigning their operating models for agility, scale, and automation. That includes: 

• Centralising and standardising functions across asset classes and geographies 
• Investing in platforms that connect data, reporting, compliance, and distribution 
• Automating repetitive tasks like reconciliation, document creation, and client reporting 
• Eliminating low-value manual workarounds that carry hidden costs and risk 
• Adopting a “radically lean” mindset—focusing talent and technology on high-value work 

This isn’t just cost containment. It’s a strategy for growth. 

Efficiency = Scalability 

One of the most overlooked benefits of efficiency is scalability. A well-designed, largely automated process can handle twice the volume with minimal additional cost. That’s why firms with lean, integrated operations can launch new funds, enter new markets, or adapt to regulatory shifts with far less friction. 

And that’s also why smaller firms, if smart about automation, can punch well above their weight. 

A strategic imperative, not a side project 

Operational efficiency is no longer a back-office initiative. It’s a strategic imperative—and one that senior leadership must champion. It underpins everything from investor trust and regulatory confidence to the ability to innovate and respond to change. 

The takeaway for leaders 

In uncertain markets, agility is power. And efficiency is how you unlock it. 

• It allows you to protect margins even when fees compress 
• It creates room for innovation and product development 
• It ensures compliance is consistent, not crisis-driven 
• It positions your firm to scale with speed and confidence 

In an environment where small inefficiencies compound into major costs, operational fitness is your moat. 

Want to see what best-in-class efficiency looks like? 

Download our new whitepaper, Navigating uncertainty, to explore how leading asset managers are reshaping their operating models for resilience, speed, and scalability.