LONDON 19th December 2014 – KPMG has today warned that investment managers must invest in big data and real-time analytics, or risk being caught short in 2015, as the firm predicts an increasingly volatile geopolitical landscape.
Tom Brown, global head of investment management at KPMG, said, “While geopolitical risk will always be in the fabric of investment management, it is the ability to manage and quickly respond to these developments that defines success.
“However as recent geopolitical developments such as the falling oil price and volatility in the Rouble suggest, risks are increasing in unprecedented variety, volume and velocity. Investment managers without the ability to analyse as well as make decisions in real-time, risk falling behind and therefore, impacting fund performance.”
Yael Selfin, head of macroeconomics at KPMG, said, “The latest Fed announcement points at US interest rates rising in the second quarter of next year, which could trigger significant market volatility early in 2015, as investors hastily readjust their global holdings.”
“Undoubtedly those who have been caught short will be reflecting on the quality of their data, modelling and ability to respond quickly. However it is equally important for those who have performed well not to be complacent. They must look at whether their existing data, systems and processes are able to cope with the increasing volatility.
“Successful investment managers will be those who invest in advanced big data and real-time analytics. This will not only help them make informed real-time decisions, but can also help with predictive analysis to maximise fund performance. Those who fail or are slow to embrace this technology risk being caught short and will potentially suffer poor fund performance.”
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.