U.S. Asset Management IT Solutions Market to be driven by Complex Financial Regulations in the Country

The rising demand for IT solutions for the effective management of assets such as international investments, fixed income, commodities, equity, and real estate is a key factor providing the needed impetus to the growth of the U.S. asset management IT solutions market. Additionally, the significant pace of growth in exchange traded funds in the country owing to the high returns and tax efficiency associated with them has developed the need for asset management IT solutions.

Transparency Market Research estimates that the U.S. asset management IT solutions market will exhibit a healthy 5.1% CAGR over the period between 2016 and 2024. As a result, the market will rise from a valuation of US$828.5 mn in 2015 to US$1,298.2 mn by 2024. 

In what ways will the challenges and drivers impact the growth dynamics of the market?

The complexities associated with key financial regulations in the U.S. is one of the key factors leading to the increased demand for comprehensive IT solutions in the field of asset management in the country. These complexities have given rise to new reporting requirements for asset managers and encouraged the introduction of IT solutions capable of maintaining records of the changes in financial regulations and the resultant fluctuations that can occur in the expected returns on an asset.

On the other hand, the market still struggles to find effective solutions to the concern regarding data security. As asset management IT solutions collect and process critical data related to the finances of large organizations and high net-worth individuals, the shortcomings of security tools and solutions could result in loss of data and finances at the hands of organized cybercrimes or data breaches. These concerns hamper the widespread adoption of IT solutions for asset management in the U.S.

Which mode of deployment and geographical segments lead the U.S. asset management IT solutions market?

Of the three chief modes used for the deployment of asset management IT solutions, the market is presently led by the on-premise segment, which is expected to account for a more than 43% of the overall market in 2016. Although the cloud mode of deployment accounts for a relatively lower share in the U.S. asset management IT solutions market, it is expected to witness expansion at a significant rate owing to the flexibility and cost-effectiveness of cloud solutions. The hybrid mode also has immense scope for future growth.

In terms of geography, the market for asset management IT solutions across the northeastern region is expected to dominate, accounting for a nearly 42% of the overall market in 2016. The market in the southern part, on the other hand, is expected to register a strong 6.1% CAGR from 2016 through 2024.

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What is the state of competition in the market?

The presence a large number of IT companies in the U.S. has made the competitive landscape of the U.S. asset management IT solutions market highly competitive. The need for low initial capital for entering into the asset management IT solutions market and the availability of less-differentiated products have also intensified the overall competition in the market.  Forming strategic, long-term alliances with large investment management companies is one of the most popular trends in the market. Number of partnerships with regional asset managers in the country have also significantly increased in the past few years.

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