Cities of future and the need to provide global solutions

May 4, 2011

Yesterday I came across an interesting study published in March 2011 by the McKinsey Quarterly.  The piece is titled “Global cities of the future: An interactive map,” and you can find the article here.  Note that the interactive map is particularly useful for filtering data, and that the site might require a free registration to view the article.  For those of you who don’t read the McKinsey Quarterly, I’d highly recommend signing up – the research is original and the topics are broad enough to interest everyone from IT specialists to C-level executives.

This McKinsey study examines geographic data by city to answer questions about how demographics will contribute to global trends such as aging, GDP growth, etc.  One of the key takeaways is that over the next 15 years, 600 cities will account for more than 60% of global GDP, and that “middleweight” cities (ex: Hyderabad) will take share of growth and GDP from “megacities” (Ex: Mumbai).

It is no secret that global trends, such as the aging of the world’s population, have a substantial impact on financial markets and thus on financial technology…and we don’t need a deep study to foresee the outcomes on investment firms.  However, if true, McKinsey’s ideas on the dispersion of wealth could shape how the asset management industry operates.  Clearly this will have a major impact on firms’ distribution models (think global investment firms taking a Procter & Gamble-like approach to distribution) and the need to localize.  The potential impact on the manufacturing portion of the asset management value chain is not as clear.  Some firms will consolidate to develop scale to lower cost despite localization, some will pursue a multi-boutique approach and others will specialize.  The winning strategy, if there is one, is far from obvious.

Regardless of how the dispersion of wealth affects financial markets, PORTIA can meet the operational needs of asset managers because our business is truly global.  We have clients in over 40 countries, our solutions are multi-currency, we cover an exhaustive array of global assets and we have demonstrated success with implementing global solutions on time and on budget.

What trends do you see based on McKinsey’s study that will have a meaningful impact on investment managers?  Is there a winning strategy for the distribution or manufacturing parts of the asset management value chain?

-Matt Bellias, Director of Strategy and Marketing

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