TECHNOLOGY AND ASSET MANAGEMENT

Technology impedance is booming near and far when considering our rapidly changing world and the many industries that are being transformed. Within ‘asset management’ technology stands as an integral aspect of the investment processes- trading, risk management, operations and client service. Forthwith, investment products are becoming progressively commoditized; size and scale being no longer fundamental factors for a hit. Thus managers require updating their approach towards competitiveness. Technology at this point usher distinctness. It not only enables core operating functions like enhancing the productivity and operational efficiency, but also improves investment performance and relationships with clients.

Research by Investment Adviser Association (IAA) and SEI project that implementation of technology can help managers differentiate and customize client experience by amplifying the company’s product range; tailor them for the changing demand fits and manage compliance besides. In a nutshell, technology provides a critical lever for improving overall business economics and increasing quality across nearly all functional areas. Since asset management business is much more than just a collection of functions; it is the aggregate of business processes arranged for potential foundation in the services of a strategic vision.

Technology has the competency to empower asset managers with the sight of securities settlement as an on-demand utility instead of a source of risk and costs. To boot technology, data plays a vital role simultaneously. The concursion of regulatory, global market and operational drivers urge the advent of data management innovators who can carve the path with cutting edge thinking rather than waiting to adopt more mature proven technology models. Whether it’s an asset management company or an asset owner who manages its assets internally, utilize data and technology to interpret risk analytics as well.

THE TOUR D'HORIZON:

Cases demonstrating technology support in asset management for its client and investment processes:

Client Acquisition and Onboarding- technology helps capturing client identifying information, information on fund, desired risk level/tolerance, regulatory attributes, fee schedules, etc.

Client Orders- enable easy transfer of process subscription or redemption information to the portfolio managers, who can decide likewise whether to invest or raise cash.

Client Administration- aids building client reports and fund fact sheets for forecasting and analysis.

Client Service- empowers customer relationships, providing client service team with timely information on client portfolios to help them address questions and facilitate ongoing dialogue with clients.

Portfolio Management- provides real-time view of positions, exposures and risks supporting “what if” analysis for trade ideas.

Trade Execution- helps view all orders and identify merging/crossing opportunities and take in and allocate fills from placed orders in real time.

Data Control and Operations- aids receiving and loading data from third party vendors, including securities, benchmarks, ratings, prices, etc

Portfolio Administration- ushers analytics and portfolio calculations like net asset values and performances. 

Risk Management, Compliance and Oversight- ensures portfolio risks and returns; monitors and manages pre-trade and post-trade compliance exceptions throughout the investment process.

Though technology does not tell investment professionals ‘what to do’, but it aids and abets them to measure their risks relative to the risk and return objectives specified by their customers, which can consequentially prop up their decision making aptitude. Withal, technology provides DIY tools to investors that empower them to make asset allocation decisions and undertake follow-up activities accordingly. 

To that end, not any transformation in the industry has more potential to revamp itself than the rise of digital technologies in asset management.