Back offices have learnt from banks' mistakes
08 January 2013 New York
Image: Shutterstock
Untapped data gold mines are the future for fund administrators, predicted Confluence in a recent report.
The firm said that fund industry back offices will evolve from cost centres into growth drivers, and that new technology investments will enable them to deliver instantaneous and accurate information, thus creating competitive advantage in an increasingly global marketplace.
While regulatory and technological advances have positioned the investment fund industry to become truly global, old technology has constrained growth, added the report.
It predicted that, 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," said Confluence COO, Skip Smith. "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."
According to Confluence, this evolution from cost centre to growth driver will be facilitated by leveraging data as a strategic growth asset, the explosive growth of distribution in Europe, and investment advisers becoming less specialised.
The firm said that fund industry back offices will evolve from cost centres into growth drivers, and that new technology investments will enable them to deliver instantaneous and accurate information, thus creating competitive advantage in an increasingly global marketplace.
While regulatory and technological advances have positioned the investment fund industry to become truly global, old technology has constrained growth, added the report.
It predicted that, 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," said Confluence COO, Skip Smith. "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."
According to Confluence, this evolution from cost centre to growth driver will be facilitated by leveraging data as a strategic growth asset, the explosive growth of distribution in Europe, and investment advisers becoming less specialised.
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