ETF boom increases operational challenges for asset services
07 June 2018 Luxembourg
Image: Shutterstock
ETF boom increases operational challenges for asset servicers according to Temenos Multifonds Every Fund Survey.
The survey found that 78 percent of the asset management industry believes ETFs will sustain current growth rates.
A further 62 percent predict increasing convergence between ETFs and mutual funds, and operational systems are seen as the top challenge and risk.
Meanwhile, one in four believe that asset servicers are not keeping place with ETF growth complexity.
Commenting on the findings of the survey, Oded Weiss, managing director of Temenos Multifonds, said: “While fragmented legacy systems and bolt-on surround technologies may have coped in the past, the asset management industry is increasingly realising that this approach is not fit for purpose moving ahead.”
“Servicing ETFs quickly, efficiently and accurately raises particular challenges, and we are seeing an increasing number of clients looking to include ETF servicing in their core investment accounting system, all wrapped up in a single, global platform to handle both future growth and potential future regulation.”
Weiss concluded: “With global ETF assets predicted to reach $7.6 trillion by the end of 2020, there’s a massive opportunity out there for those asset servicers who get it right.”
The survey found that 78 percent of the asset management industry believes ETFs will sustain current growth rates.
A further 62 percent predict increasing convergence between ETFs and mutual funds, and operational systems are seen as the top challenge and risk.
Meanwhile, one in four believe that asset servicers are not keeping place with ETF growth complexity.
Commenting on the findings of the survey, Oded Weiss, managing director of Temenos Multifonds, said: “While fragmented legacy systems and bolt-on surround technologies may have coped in the past, the asset management industry is increasingly realising that this approach is not fit for purpose moving ahead.”
“Servicing ETFs quickly, efficiently and accurately raises particular challenges, and we are seeing an increasing number of clients looking to include ETF servicing in their core investment accounting system, all wrapped up in a single, global platform to handle both future growth and potential future regulation.”
Weiss concluded: “With global ETF assets predicted to reach $7.6 trillion by the end of 2020, there’s a massive opportunity out there for those asset servicers who get it right.”
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