Welcome!

News Feed Item

Fund industry back offices to evolve from cost centers into growth drivers

In 2014, Confluence predicts fund administrators will begin the paradigm shift from cost centers to strategic growth engines by tapping long-overlooked data goldmines. New technology investments will enable them to deliver instantaneous and accurate information, thus creating competitive advantage in an increasingly global marketplace.

Regulatory and technological advances have positioned the investment fund industry to become truly global, but old technology has constrained growth. In the coming year, downward price pressure from fund managers and growing demands to support international distribution will prompt new back office investments in both efficiency and innovation.

“It is no longer enough for back offices to merely cut costs. Going forward, the most innovative won’t just reduce – they will produce,” Confluence Chief Operating Officer Skip Smith said. “They will also apply the lessons the banking industry learned more than a decade ago and find new ways to leverage data and automate to achieve real efficiency and drive growth.”

This evolution from cost center to growth driver will be facilitated by:

1. Leveraging data as a strategic growth asset

2. Explosive growth of distribution in Europe

3. Investment advisers becoming less specialized

Back Offices that Tap Their Data Goldmines will Avoid Commoditization and Contribute to Growth

The fund industry is becoming commoditized as fund managers scrutinize the costs of undifferentiated third-party administrators and seek better service at a better price. In the next 12 months, Confluence believes more money will be spent on back-office technology, but with far fewer vendors.

“Savvy fund administrators will realize they sit on a goldmine of data that, if extracted quickly and delivered in a consumable format in real time, can help drive sales growth. They will differentiate themselves with more solutions, quick payoffs and transformative technology,” Smith said. “We expect more back offices to automate routine activities and displace prevailing processes such as typesetting, which is currently an outsourced reporting bottleneck. And they will use technology to deliver fact sheets and other data to their middle and front offices faster and more accurately, enabling fund companies to better attract investors and thereby extract real value from the back office.”

Explosive Growth in Europe will Necessitate Long-Overdue Back-Office Technology Updates

The private placement regime allows non-European alternative investment managers to distribute to Europe, and AIFMD and UCITS “passports” are reducing the burdens and costs of cross-border selling on the Continent. Fund administrators on both sides of the pond have the opportunity to build competitive advantage by offering new services that can help their clients increase distribution into global channels.

“In recent years, tumultuous financial markets and lower profits have inhibited IT spending among financial services firms,” Smith said. “But the heavily manual processes and spreadsheets still used in many back offices now pose a very real risk of impeding fund companies’ growth by limiting their scalability and exposing them to reputational risk.”

Confluence believes an increase in distribution activity across Europe in 2014 will lead to increased investment in data management and automation to accommodate the scale necessary to operate internationally and to aid in regulatory compliance.

As Investment Advisors Become Less Specialized, Administrators Will Need Flexible Platforms that Support Various Investment Types

In 2014, Confluence believes that even more asset managers will sponsor multiple types of funds, e.g. companies that typically offered mutual funds will launch hedge funds, and vice versa. Further, fund advisors are diversifying more than just fund types: Individual advisors are launching multiple fund types within multiple domiciles.

Some back offices have cobbled together disparate platforms to create systems that can handle the various requirements of traditional, mutual funds, UCITS, alternative investments, ETFs and other products, but these systems cannot yet handle the consolidated investor reporting clients will demand, or meet high standards in transparency, risk management and regulatory compliance across the entire suite of funds.

In 2014, we will see back-office technology advance to provide more efficient data harmonization, and those who can automate global regulatory changes and reporting across a diverse suite of funds will be better able to take advantage of opportunities for scale and adapt to P&L challenges.

About Confluence

For more than 20 years the global investment management industry has come to trust Confluence to deliver innovative solutions to take the risk out of fund administration. Helping investment management companies gain unprecedented control, Confluence automates every step of the fund administration process – including the collection, creation, confirmation and delivery of investment product data. Results are lower costs, reduced risk, decreased reporting turnaround times and the scalability to automate more processes without additional resources.

Confluence solutions are used by 40 percent of the leading global investment managers, and more than 60 percent of U.S. mutual funds. From the Confluence traditional install, hosted and outsourced Unity® platform solutions to our enterprise-grade SaaS enabled Unity NXT platform, Confluence automates critical fund administration and reporting processes – such as regulatory reporting, financial statement preparation and performance reporting. Confluence solutions support a wide array of collective fund investment types – including European domiciled UCITS, alternative investments, traditional U.S. based ’40 ACT mutual funds, and contemporary fund structures such as ETFs.

Headquartered in Pittsburgh, PA, Confluence serves the international fund industry with key locations in San Francisco, CA, London and Luxembourg. For more information, visit www.confluence.com.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin, ...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...
SYS-CON Events announced today that Infranics will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Since 2000, Infranics has developed SysMaster Suite, which is required for the stable and efficient management of ICT infrastructure. The ICT management solution developed and provided by Infranics continues to add intelligence to the ICT infrastructure through the IMC (Infra Management Cycle) based on mathemat...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Building custom add-ons does not need to be limited to the ideas you see on a marketplace. In his session at 20th Cloud Expo, Sukhbir Dhillon, CEO and founder of Addteq, will go over some adventures they faced in developing integrations using Atlassian SDK and other technologies/platforms and how it has enabled development teams to experiment with newer paradigms like Serverless and newer features of Atlassian SDKs. In this presentation, you will be taken on a journey of Add-On and Integration ...
There are 66 million network cameras capturing terabytes of data. How did factories in Japan improve physical security at the facilities and improve employee productivity? Edge Computing reduces possible kilobytes of data collected per second to only a few kilobytes of data transmitted to the public cloud every day. Data is aggregated and analyzed close to sensors so only intelligent results need to be transmitted to the cloud. Non-essential data is recycled to optimize storage.
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership abi...
The essence of cloud computing is that all consumable IT resources are delivered as services. In his session at 15th Cloud Expo, Yung Chou, Technology Evangelist at Microsoft, demonstrated the concepts and implementations of two important cloud computing deliveries: Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). He discussed from business and technical viewpoints what exactly they are, why we care, how they are different and in what ways, and the strategies for IT to transi...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service.
Niagara Networks exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...