Marching to a Different Beat: Architectures and IT Sourcing Options for Asset Managers
As investment strategies become more sophisticated, diverse, and under stricter regulatory reporting requirements, operations and technology need to keep up.
Celent has released a new report titled Marching to a Different Beat: Architectures and IT Sourcing Options for Asset Managers. The report was written by Jay Wolstenholme, a Senior Analyst in Celent’s Securities & Investments practice.
With more than 6,000 global asset managers ranging from $100 million assets under management (AuM) to $4.5 trillion AuM, firms have diverse investment mandates and objectives. Their portfolio investment tools need to properly match the analytics, monitoring, trading, and portfolio management capabilities required for investing and effectively reporting to clients and regulators. The easy trap for asset managers to fall into is not accurately matching operations and technology to their actual business and investment requirements.
It is fair to say that the asset management business has historically underinvested in technology, but has been able to survive because of decent returns. This is no longer the case, and asset managers realize they need to upgrade, but now the trick is not to be undersold or oversold.
Once the decision is made that reengineering is a business necessity, the choice then turns to how to source and implement it. This is where the buy side has a great advantage through web hosting, cloud options, and superior technology. Capital costs can be reduced by use of annual licensing pricing plans, and asset managers can access secure, best-of-breed, and cost-effective solutions.
“As asset managers diversify investments and strategies become more sophisticated and under stricter regulatory reporting requirements, operations and technology need to keep up if firms are to stay in the competition,” said Wolstenholme.