Addressing Challenges in Asset Management

With the world evolving at a rapid pace, especially in the post-pandemic era, hindrances in wealth management are rising accordingly, that ought to be addressed on an effective note.               

FREMONT, CA: The aftereffects of the pandemic scenario opened up an unprecedented series of interconnected geopolitical and macroeconomic challenges, which increased in scale with time. Various factors like war, superpower rivalry, energy crises, supply chain issues, and soaring commodity prices have further upscaled the challenges in the community, which is likely returning to a new normal phase in recent times. As a result, the so-called poly-crisis is a critical inflexion point in tackling rising tensions and power rivalries at the forefront of global affairs.

Economic threats like inflation are also soaring, with monetary policies across Europe replacing the ultralow interest rates and intermittently rising from 0.5 to 3.5 per cent annually. As a result, innovation frontiers in the arena are looking out for critical possibilities in addressing deglobalisation, decarbonisation, and demographics. Wherein, returning to the pre-pandemic scenario is often impossible, requiring delicate effort and consideration, especially with the dynamic growth of the investment outlook.

This very transformation has posed an unpredictable investment outlook for asset owners and managers alike, transforming financial markets via high-interest rates. Leaders in the majority of central banks are highly suggesting a likelihood of monetary tightening, in addition to a squeezed liquidity period and repricing per the rebalancing of portfolios among investors.

Long-term changes favouring an exit from current volatility are imposing several other threats in the arena, despite its plausible opportunities. Hence, technology leaders in the space are seeking critical opportunities to tackle the challenges in the investment markets, thereby facilitating a well-established future.

One such testamental force in reshaping the investment outlook is deglobalisation and nationalism, which tackle the geopolitical rivalries and pandemic scenarios for distinguished economic integration. Further, with globalisation evolving on an increasingly large scale, the desire to build great strategic autonomy and national resilience addresses slow cross-border flows and the inflation of labour prices.

The global population is ageing on a critical scale, thus triggering varied transitions in demographics and healthcare. For instance, the population of elderly citizens (people above 60 years of age) is increasing and is anticipated to reach nearly 1.4 billion in 2030. An accelerated life expectancy may strain retirement provisions, due to which, public healthcare may turn unaffordable in the arena, where expecting a critical demographic dividend helps. Green rebalancing is another crucial factor, where factors like demographic shifts, economic and social changes, and family planning are critically levelling up. This, in turn, is inducing female empowerment.