Thirty eight percent of fund firms across the country said that they will increase technology-related costs while a total of 17% of respondents said they expected no change in whether their firm's technology costs would rise or decline for the rest of 2013, according to the 2013 Money Management Executive Technology Survey.
Fourteen percent expected their tech budgets to decline this year.
This is a slight drop-off from last year's survey where 41% expected spending on technology at their firms to pick up. Only 10% expected it to decline. The suvey was conductde in April and May 2013. Seventy nine chief executives, operating executives, compliance officers and other senior managers of mutual funds, exchange-traded funds and other industry funds responded to questions posed by MME research partner Lodestar Research of Princeton, N.J.
A Push Toward Mobile
Among key findings: Forty-four percent of fund firms with $100 billion or more in assets under management are expecting to use smartphones to increase executive or staff productivity, according to the survey.
Smaller firms are about one-third as likely to be deploying smartphones to increase executive or staff productivity, with 16% of firms with less than $100 billion in assets under management making use of such technologies.
Meanwhile, 12% of fund firms with $100 billion or more in assets under management are adopting iPhones/smartphones for the first time this year, compared to 16% of firms with less than $100 billion. When it comes to iPads and tablets, 23% of firms with $100 billion or more in assets more will be adopting such technologies for the first time this year, compared to 37% of firms smaller in size at $100 billion or less.
The gradual embrace of mobile devices can be explained simply: "Mobile work environments increase productivity, especially during travel periods," according to an executive based in Newport Beach, Calif. at a $100 billion-plus firm.
According to last year's survey, 36% of respondents said that their firms were allowing employees to use iPads and other tablet computers for the first time, and another 20% said that their firms had begun to embrace iPhones and other phones that make it easy to tweet or update Facebook and LinkedIn pages.
Last year's study also showed that mobile devices were the primary means of increasing productivity. The survey showed 51% of respondents said iPads and tablet computers were the best technological means of increasing productivity at this point and another 32% pointed to smartphones.
Don't Forget Your Website
To reach customers and increase revenue through technology the survey showed that 86% of respondents rely largely on their firms' websites with information about the company and its products.
A total of 46% of respondents selected Twitter to communicate with customers, with 33% selecting Facebook to promote products or services, and 31% selecting LinkedIn discussion groups. Direct commerce site where the user can purchase shares and downloadable apps were each selected by 20% of respondents.
In contrast, last year's survey found that 50% of respondents said that their companies were adopting social media such as Facebook, LinkedIn, and Twitter for the first time.
It was a big step from 2011, when fewer than 20% of respondents said their firms used either Twitter or Facebook to communicate with present or future customers.
In terms of specific areas in which fund firms-who will be cutting tech-related costs-expect costs to be cut the most in this year's survey, 9% noted systems replacement, 7% listed back office and administration operations, and the categories of proxy solicitation and electronic voting system(s), sales management software, and XBRL reporting each got 5%.
So what will be asset managers' primary technology-related cost-cutting mechanisms?
Fifty percent said they would renegotiate with vendors, while 38% said they would virtualize their storage. Meanwhile, the categories of creating private cloud computing (charging departments for capacity as used), consolidating vendors, using open source software, reducing staff, and outsourcing more processes each attracted 25% of respondents.