AI use can boost efficiency, break cost barriers & enhance profitability of Asset managers: McKinsey Report

Artificial intelligence (AI) is shaking up the world of asset management, and it’s a game-changer for boosting efficiency and cutting costs, according to a new McKinsey & Company report. For asset managers handling massive investments, embracing AI right now could streamline operations and skyrocket profits in ways they’ve never seen before.

The report highlights how the AI revolution lets asset managers break free from old, stuck cost structures. By ramping up efficiency across their entire business, they can transform how they work. McKinsey lays out a smart roadmap with six key steps to help these firms grab the full power of AI and stay ahead in the competitive finance world.

First up: Focus on domain-based transformation. Instead of small, scattered AI tweaks that only bring minor wins, asset managers should rethink their whole workflows from scratch. This zero-based, AI-powered redesign can unlock huge structural efficiencies, making operations smoother and smarter.

Next, it’s all about revamping talent strategies and operations. AI isn’t just tech—it’s a big shift for teams. Companies need to update their workforce plans, embrace change, and weave AI into daily tasks without missing a beat. This keeps everyone on board and productive.

Optimizing operating models comes third. Top asset managers succeed by mixing centralized control with hands-on experimentation at the team level. This setup sparks innovation while keeping things efficient, ensuring AI tools deliver real results.

The fourth step? Take charge of your technology roadmaps. Turn IT from a basic support role into a powerhouse that drives competitive edges. This move can boost productivity and help firms thrive in the fast-changing asset management landscape.

Fifth, build strong data strategies. AI thrives on quality data and flexible tech setups, so asset managers must overhaul their data governance. By decentralizing access and strengthening ecosystems, they can fully tap into AI’s potential for better decision-making.

Finally, drive cultural shifts and manage change effectively. The report stresses that AI adoption needs patience—think gradual steps, solid support, and rewiring how people think and act. Without this, even the best tech won’t stick.

McKinsey also spotlights agentic AI, the next big wave that’s like a once-in-a-lifetime chance to reclaim profit margins. For example, a mid-sized asset manager with $500 billion in assets under management (AUM) could slash 25 to 40 percent of its total costs through full AI workflow overhauls.

The clear takeaway? Asset managers who dive in decisively and invest in all six pillars will lead the pack in the AI-driven future of finance. It’s time to act and turn AI into a real advantage.


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