Cost Basis Reporting: Reducing Total Cost of Ownership

Spending on cost basis reporting is not limited to the cost of developing or purchasing software. Among brokers, operations and staffing costs account for almost three-quarters of total spending on cost basis reporting. As such, it is vital that firms find ways to control these costs.

In the report Cost Basis Reporting: Reducing Total Cost of Ownership, Celent explores long-term influences of total cost of ownership, predictors of high costs, and ways to maximize cost basis reporting investment.

Firms are still focusing on compliance for fixed income and options regulations, but they are also increasingly exploring ways to make their technology more efficient in the long term. Addressing operations processes such as data scrubbing, reconciliation, and integration of systems are of highest priority. These new considerations are a result of firms recognizing the increased spending in cost basis reporting.

“The biggest predictor of higher than average costs is the development of in-house technology,” says Alex Camargo, Analyst and author of the report. “There are, however, ways for all firms to reduce their TCO. Firms cannot go back in time and reduce their in-house investments. But they can look at their current operations, their data scrubbing efforts, and their downstream systems to make the process more efficient going forward.”

The report begins with an overview of firm priorities and market trends. It then describes key drivers of spending and analyzes what factors predict higher and lower spending and budgets. The report concludes with a forward-looking perspective on how firms can maximize their cost basis reporting investment.