Asset managers turn to outsourcing, AI: Survey

Global asset managers are sharpening their focus on core capabilities, increasing their use of outsourcing and tightening cost controls as they pursue more disciplined growth, according to a new Northern Trust survey.

The Driving Growth in Asset Management 2026 report, based on responses from 300 senior executives across North America, Europe, EMEA and Asia-Pacific, found firms are becoming more selective about where they deploy resources amid market volatility, fee pressures and rising operational complexity.

Product expansion has fallen as a strategic priority, with 47% of respondents citing it compared with 60% in 2024, while the proportion prioritising product reduction increased from 5% to 28%.

"The central theme emerging from our study is a renewed focus on the core: core products, core capabilities, core markets and core client relationships," the report said.

The shift towards simplification is also reflected in operating models, with some firms prioritising a major target operating model redesign falling from 75% in 2024 to 46% in 2026. Enhancing quality and accuracy and controlling costs was identified as the leading operational priorities.

At the same time, the number of managers planning to outsource non-core activities to achieve their priorities more than doubled to 39% from 18% two years earlier.

Northern Trust head of asset managers and private markets for the Americas Ryan Burns said managers were focusing resources on areas where they could differentiate.

"Asset managers are pursuing growth with greater discipline and a sharper focus on the areas where they can differentiate," Burns said.

"Rather than pursuing broad-based expansion, firms are directing resources toward investment expertise, client outcomes and distribution, while extending successful strategies through vehicles such as ETFs, semi-liquid funds and collective investment trusts."

Cost pressures are also reshaping operating models with offshoring cited by 69% of respondents as a cost-control strategy, followed by automation and technology improvements at 52% and outsourcing non-core activities at 42%.

Artificial Intelligence (AI) adoption has moved beyond experimentation, with every respondent reporting some form of deployment. The leading use cases include data accuracy and quality control, document management and research and report summarisation.

Northern Trust head of asset servicing for EMEA Nick Gilbert said AI's effectiveness would depend on the quality of underlying data.

"AI is moving from experimentation to implementation across the industry," Gilbert said.

"But its value will depend on the quality, governance and accessibility of the data beneath it. This is not just a technology issue; it is an operating model and resilience issue."

The survey also found more than half of managers plan to target new global markets, while firms increasingly favour strategic partnerships to support scale and operational efficiency.

New client types were identified by 54% of respondents as a growth priority, followed by expansion into new countries at 53% and technology-driven distribution channels at 50%.

The report said distribution is becoming more targeted and channel-focused, with managers increasingly looking to scale through ETF model portfolios, semi-liquid structures and retail wealth platforms.

"Managers are doing more with less, consolidating the number of providers they rely on and going deeper with the partners they trust," the report concluded.