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
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single-threaded, you can effectively identify hot spots in your serverless code. In his session at @DevOpsSummit at 21st Cloud Expo, Dave Martin, Product owner at CA Technologies, will give a live demonstration and code walkthrough, showing how ...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...
Cloud adoption is often driven by a desire to increase efficiency, boost agility and save money. All too often, however, the reality involves unpredictable cost spikes and lack of oversight due to resource limitations. In his session at 20th Cloud Expo, Joe Kinsella, CTO and Founder of CloudHealth Technologies, tackled the question: “How do you build a fully optimized cloud?” He will examine: Why TCO is critical to achieving cloud success – and why attendees should be thinking holistically ab...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
As more and more companies are making the shift from on-premises to public cloud, the standard approach to DevOps is evolving. From encryption, compliance and regulations like GDPR, security in the cloud has become a hot topic. Many DevOps-focused companies have hired dedicated staff to fulfill these requirements, often creating further siloes, complexity and cost. This session aims to highlight existing DevOps cultural approaches, tooling and how security can be wrapped in every facet of the bu...
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, will introduce two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a...
yperConvergence came to market with the objective of being simple, flexible and to help drive down operating expenses. It reduced the footprint by bundling the compute/storage/network into one box. This brought a new set of challenges as the HyperConverged vendors are very focused on their own proprietary building blocks. If you want to scale in a certain way, let’s say you identified a need for more storage and want to add a device that is not sold by the HyperConverged vendor, forget about it....
SYS-CON Events announced today that Calligo has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo is an innovative cloud service provider offering mid-sized companies the highest levels of data privacy. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalized support service from its globally located cloud platform...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
SYS-CON Events announced today that Elastifile will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Elastifile Cloud File System (ECFS) is software-defined data infrastructure designed for seamless and efficient management of dynamic workloads across heterogeneous environments. Elastifile provides the architecture needed to optimize your hybrid cloud environment, by facilitating efficient...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Launched in 2016, Cloudistics helps anyone bring the power of the cloud to the data center in an easy-to-use, on- premises cloud platform that automatically provides high performance resources for all types of applications: Docke...
With Cloud Foundry you can easily deploy and use apps utilizing websocket technology, but not everybody realizes that scaling them out is not that trivial. In his session at 21st Cloud Expo, Roman Swoszowski, CTO and VP, Cloud Foundry Services, at Grape Up, will show you an example of how to deal with this issue. He will demonstrate a cloud-native Spring Boot app running in Cloud Foundry and communicating with clients over websocket protocol that can be easily scaled horizontally and coordinate...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
@DevOpsSummit at Cloud Expo taking place Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center, Santa Clara, CA, is co-located with the 21st International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is ...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...