A new report from PwC predicts that the ETF (Exchange-Traded Funds) industry will face major disruptions due to technology in the coming years. According to the study, "almost every familiar aspect of the ETF industry will be reshaped by the unprecedented onslaught of automation."

The report, based on a survey conducted in 2016 with executives from 60 global ETF and asset management firms, reveals that these firms represent over 80% of global ETF assets. It forecasts that with advancements in data analytics and artificial intelligence, ETF investment operations will be increasingly influenced, making managers' decisions more precise and based on vast amounts of data.

Automation in brokerage services is also rapidly evolving, with one-third of respondents believing that the business model of ETF brokers will be dismantled in favor of increasingly sophisticated automated advisory services for mass affluent investors. The report predicts that in five years, automated platforms will manage between $10 billion and $25 billion in assets, with nearly a quarter of participants believing this number could exceed $100 billion.

The report also highlights that large incumbent asset managers have an advantage due to their ability to invest in technology, enabling them to counter emerging fintechs. To remain competitive, firms will need to embrace advanced technologies and invest in partnerships with tech companies to meet client demands.

Source : thinkadvisor