Capturing knowledge

Product lifecycle management is a potential game-changer in financial services

Miriam Gillinson
30 July 2018

3 min read

PowerPoint presentations, Excel spreadsheets and even email are considered increasingly outdated forms of technology in our everyday lives, yet they still play a significant role in product development in the asset management industry. But with competition increasing, profit margins tightening and regulations skyrocketing, the asset management industry is turning to product lifecycle management solutions.

Product lifecycle management (PLM) is a relatively new term within the asset management industry. The discipline tracks and enables the entire product development process – from initial brainstorming to product development, refinement, regulatory review and product launch – and it’s gaining traction in financial services.

Common in the engineering and manufacturing industries, PLM is a long-overdue innovation in financial services, said William Lucken, global head of products at Allianz Global Investors, a global assets management company based in Frankfurt, Germany.

“Asset managers have a bunch of sophisticated tools to allow them to be great portfolio managers," Lucken said. “But from my experience within the products world, most asset managers don’t demonstrate that same level of sophistication."

It’s time for asset managers to advance beyond routine tools that create no audit trail, including spreadsheets and email, he said.

“We’re using technology from 30 years ago without questioning it,” he said. “It’s no longer acceptable that we can run our business in that way when the rest of the world and our daily lives [have] transformed from a technological perspective.”


As Abhijit Rawal of PwC observed at a London Business School conference in 2017, the asset management industry has been transformed by the “four R’s”: returns are low, revenues are being squeezed, regulations are being tightened and the robots are coming to gobble up business.



As a result, asset managers are waking up to the importance of integrating new technology into the entire product development process. But it’s not just about updating outdated technological frameworks – it’s also about offering products that will survive and thrive within an increasingly competitive and volatile financial industry.

“The volatility and the changes to the market mean that you might make a mistake in your development process because you don’t have adequate control of the information,” Allianz’s Lucken said. “A PLM platform should allow a company to better record the decisions they make – why we make certain decisions based on particular data – so that we are more in control at every stage.”


Seismic shifts in macroeconomics also have impacted customer needs and expectations. Jaspal Sagger, the Baltimore-based head of international product at global asset management firm Legg Mason, said customers are now looking beyond benchmarks like relative investment performance when it comes to investment strategy.

“Asset managers used to compete on performance alone, earning healthy profits on assets raised in the good times,” he said. “The landscape is very different today – intense competition has squeezed margins, while investors are now savvier about the dangers of chasing returns. Performance will always be important, but we expect a continued shift towards outcome-orientated strategies that address specific client needs, and not only changing economic circumstances but also demographic or regulatory challenges. Clients are looking for partners that go beyond performance.”

Sagger said that distributors are increasingly looking to partner with fewer asset management firms. Therefore, managers with disciplined PLM processes will have far greater control over their future success.

“This is particularly true when PLM is focused on delivering products and vehicles that are well designed, differentiated, fairly priced and specifically focused on clients’ needs,” Sagger said.


In the past, products might have been delivered via PowerPoint presentations and haphazardly archived over emails.

But a more rigorous approach to PLM – in which every stage of the product development process is tracked and recorded – could save significant time and money, and prevent good ideas from being lost when their champions change jobs.

“Investment themes tend to be fairly cyclical,” Allianz’s Lucken said. “Ideas that were out of fashion 10 years ago might suddenly be revitalized and looked at again. But if you don’t have a tool that records everything you did, the decisions you took and why you took them, then your fate is just to repeat the cycle.”

An efficient PLM process can greatly boost a company’s corporate memory, one of the key reasons for its increasing prominence within the asset management industry.

“The [PLM] discipline is growing out of its traditional role as an engineering system and is increasingly recognized as a key piece of the company’s infrastructure and – where the crown jewels are held – their intellectual property,“ PwC’s US PLM leader, Tim Burks, said recently in online business journal Raconteur.

Not only is an idea never forgotten with PLM; if product development is handled efficiently and coherently, then all ideas generated should line up with the company’s overall strategy.

“Really good product development only occurs in investment management when everyone understands what the benefit of the vehicle is to the end client,” Lucken said. “If people aren’t fully aware or if they’re only a minor part of the process and don’t have the data available to them, then they don’t see the bigger picture of what the product is trying to achieve.

“A lot of people go to work everyday and they just turn the handle,” Lucken said. “But good PLM should allow everyone in the business to understand what is going on and why.”

For information on improving product development with PLM, please visit:

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