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Clearwater Analytics’s research reveals institutional investors are focused on tightening belts in 2023 

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Saving money trumps other factors when pension funds, insurers and corporates are assessing technology platforms in the New Year, according to new findings from Clearwater Analytics (CWAN). 

The research, which polled institutional asset owners representing USD10 trillion in assets under management (AUM), was geared at getting a better understanding of how investors view their investment technology platforms, and where their budget priorities are focused for 2023.   

Cost control through greater operational efficiency rules the day, with four fifths of respondents citing this as one of their key objectives, whilst ease of implementation and outright cost followed at around 60 per cent. Interestingly, the firm writes that the lowest priority was front office client support – perhaps showing a reassessment of priorities for 2023 towards the middle and back-offices.  

Next year is also being seen throughout the industry as a major implementation year, with various different regulatory changes due to come into force across the year.  

When it came to where budgets were being allocated for 2023, the most commonly cited areas were risk analytics, performance & attribution, reporting, and portfolio management systems. This can be accounted for by the fact that over half of the respondents reported lacklustre feelings toward their current investment stack. When asked on three budget priorities, reporting and portfolio management topped the list.  

Commenting on the survey findings, Gayatri Raman, President, Europe and Asia, Clearwater Analytics. says: “Our research has found that investors want technology to help improve their efficiency, attract and retain employees in the face of ‘The Great Resignation’, and ultimately increase bottom-line profitability. They also want to get to their solution faster and control cost. These are all advantages of cloud-based technology, which could be a contributing factor as to why cloud-based technology is the top choice for the investors we polled.” 

Unsurprisingly, the research found widespread adoption of cloud technology among investors. For 40 per cent of the investors polled, cloud technology makes up 75 per cent or more of their tech stack. Only 14 per cent of institutional investors polled use cloud platforms “very little.” Cloud-based investment technology has certainly taken hold and continues to grow, the firm writes. 

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