PwC points out: Profit margins of asset management institutions are under pressure, and rising infrastructure costs exacerbate this stress
PR Newswire
1h ago
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According to PwC, as infrastructure costs rise, the profit margins of asset management institutions continue to be under pressure. The report shows that since 2018, profits calculated based on managed assets have declined by 19%, and it is expected to fall another 9.1% by 2030.
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Luxembourg, November 3, 2026 / PRNewswire / -- Infrastructure is shifting from providing backend support to becoming a core element of asset management strategies. According to the report Global Asset Management Infrastructure, since 2018, profits calculated based on managed assets have decreased by 19%, and it is expected to decline further by 9.1% by 2030. The decisions companies are making regarding whether to build in-house, procure, or obtain through partners are now shaping the competitive landscape of the industry. The report also indicates that 67% of respondents stated that cost pressures limit their investment capabilities.

The expenditure structure is still influenced by past patterns: only 23% of asset management institutions allocate the majority of their technology budgets to new features, while 29% of these institutions spend over 70% of their budgets on maintaining outdated systems.

This study, based on surveys of 150 asset management firms and 50 infrastructure providers, concludes that artificial intelligence is exacerbating these limitations. Approximately 24% of respondents viewed data fragmentation as the main obstacle to expanding the application of AI, while 17% considered outdated systems to be the primary barrier.

PwC, the head of global asset and wealth management consulting, Roland Kastoun stated: "The profits of this industry, calculated based on managed assets, have declined by nearly one-fifth, while infrastructure costs continue to rise. In the next five years, those managers who will survive will not be those with the most complex AI, but rather those who handle what are often referred to as 'boring tasks' well first."

Market data is considered to be costly with low returns; 58% of respondents listed it as one of the most expensive infrastructure layers, even more so than regulatory reporting systems (47%) and core technology platforms (46%).

At the same time, approximately 70% of infrastructure providers expect to occupy a larger share of industry revenue, while 68% of respondents regard hyperscale cloud service providers as the greatest emerging threat.

PwC The person in charge of financial services in Luxembourg, Bj ö rn Ebert stated: "Seventy percent of infrastructure providers are expected to get a larger share of the pie, which indicates that the power within the industry is quietly shifting."

Approximately 44% of respondents prefer a mixed procurement model, which combines in-house development, outsourcing, and collaboration; 21% prefer direct procurement, 18% prefer the partner model, and 13% are more inclined towards internal development.

The report also identified four new types of infrastructure prototypes: infrastructure coordinators, digital platforms and tokenization platforms, specialized modular suppliers, and integrated asset management institutions. The report states that there is no one-size-fits-all model that applies to all companies. Each company must decide for itself which aspects to control in-house, which to standardize, and in which areas it is more appropriate to rely on specialized suppliers. The sooner these decisions are made, the more likely it will be to maintain profit margins by 2030.

Media contact: Penta Group, [ email protected ]

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