The Value of Adopting Asset Servicing Solutions

Asset management is a sector primed for continued growth. As a report by PricewaterhouseCoopers reveals, global assets under management (AUM) is expected to grow by nearly 6% each year 2020, especially in North America, although expansion is also predicted for Asia, Africa, and South America. To keep up with this growth rate as well as the emergence of new markets, asset managers will greatly benefit from investing in asset servicing solutions that are tailored to their portfolio management needs and the industry requirements for transparency in operations, compliance, and tax reporting.

Below are some of the advantages that middle and back-office solutions by asset servicing firms can bring to fund managers:

Close monitoring and measurement of performance. To new players in the industry, good performance can simply mean delivering a gain on investments. The more experienced fund managers, however, understand that performance should be based on more long-term criteria. They ask such important questions as: How sustainable is the fund growth? Does the gain come with great risks? Is it based on real increase in value, or is it merely the result of an investment bubble? Through the use of technology, asset managers can systematically measure their performance and derive meaningful insights from data collated over time.

Process automation. Fund administration solutions such as portfolio management software on the whole speeds up the processes in asset management. Additionally, automation through technology lets fund managers cut down on operational costs, help reduce human errors, enhance their firm’s reporting and compliance management capabilities, and redirect the time saved to the more strategic functions.

Cloud-based data warehousing and management. Much of fund management is based on gleaning significant patterns from aggregated data, and using these to guide future investment decisions. It is very important for the data to be on the Cloud to ensure access from everywhere, promote connectivity with all brokers, make information available in the real-time, and allow for speedy data normalization and validation.

Customized, scalable tools. Not all fund managers are created equal. Each has unique needs, depending on its clientele and the trading context in which it conducts transactions. Asset servicing solutions may feature for customizable dashboards based on the requirements of the user, scalable based on its size of operations.

Effectively, all these benefits contribute to the fund manager’s operational strength, which will only serve to boost its overall performance and growth strategy amid a highly dynamic investment landscape.

Leo Aranas is an online writer and blogger.