Question

Why is engaging in asset management difficult for banks?

Answer 1

The engaging in asset management for banks is difficult for the followings:

1. The world is changing fast, and the banking industry is not an exception. Now a day the rules and regulations change almost every day to keep the banking industry updated according to the needs of the world. Hence, it is very difficult for the banks to maintain a break even between the existing and new sets of rules and regulation related to asset management.
2. As discussed above the needs of the market is fragile, this demands something new almost every day from the banks. Thus, it is a strenuous task for the asset managers to cope with the volatile nature of the world.
3. Managing something requires something unique than other sustainably. For example, if a bank provides services to its customers, it should differ from other in a practically sustainable and profitable way. So it becomes difficult for asset managers to manage asset in a different and sustainable way.
4. The shifting expectation of clients is also a factor which makes it difficult for the asset managers in managing the assets of a bank.