When carrying out a strategic review of their systems and operational landscape, asset managers typically face three common themes: controlling cost of IT infrastructure, reducing complexity of their ecosystems, and increasing agility of the company to accelerate time-to-market of new products and services, including innovation of new technology.
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There are several strategies an asset manager can pursue in attempting to meet these challenges. However, if, as is often the case, an asset manager has grown organically over many years through acquisitions and expansion of products and services, complexity of the systems architecture and operating model become a severe impediment to change. There comes a time, especially for large asset managers, when it makes sense to rationalise all the systems and processes by implementing a single, integrated front to back-office investment management system. In this edition of our series of white papers, we will explore in-depth the drivers and the process of implementing such an integrated platform.
Large-scale projects of this magnitude carry significant risk and require a budget to match. Additionally, because this type of change may come around once every ten to fifteen years, there is often a lack of experience within a firm to manage it. Relying on vendor to oversee the transformation is also risky given the clear conflict of interest. However, these challenges can be overcome with the right vision, strategy and a team consisting of a blend of external expertise and internal resources.
Moreover, growth enablers that are dependent on the firm’s core systems such as digitalization of the company, moving to cloud, services for improving client experience and utilizing big data opportunities are helped through a stable and centralized investment management platform.
A survey by Funds Europe research group in 2018 reported that “15 of the largest global asset management firms, collectively with over £7 trillion in assets under management, found over two thirds felt slowed down by legacy systems and culture clashes.” This crystallizes the view that there is a deep desire for technological innovation and modernisation from within a traditionally conservative asset management industry that feel slowed down by legacy.
Although the challenge of such large scale change is a formidable one, the benefits, if successfully managed and implemented, go beyond the immediate realisation of improving cost, complexity and agility. The future of a company’s competitive edge is wholly dependent on it.
To find out more, contact the author, Ozkan Kocakaya.