Fund Forum: Operations and back office are 'missing opportunities'
25 June 2019 Copenhagen
Image: Shutterstock
Due to a lack of efficiency, operations departments are “missing some opportunities” within asset servicing, according to a panellist at the Fund Forum in Copenhagen.
The panellist explained that there needs to be more efficiency in operations roles to free up the capacity of people available, who could be doing more in other areas.
Another panellist said, in order to explore these opportunities, there needs to be a collaborative notion within a firm that every transition requires “a mindset change, and sometimes it’s not an issue to experiment and fail”.
The panellist indicated that experiments are needed and are required to make a successful pace in production of asset servicing models.
He advised that a business should have the traditional management side of its business running parallel with the data/technology and operations side.
He cited: “If you want to see smart analytics and good collaboration leave the operations people to work on their own solutions.”
Another panellist advised firms to share decisions globally “depending on the scale of your organisation. Look for scale, a global vision.”
The moderator then asked the panel if they thought they would be replaced by robots, to which one panellist said: “No, it may be more technology-based, but there will probably be fewer operations people.”
Another concluded: “You don’t pay for your back-office, ultimately your customer does, you have to demonstrate and evidence your choices. You also have to work out the costs for those choices and services and make sure they are appropriate in terms of value. That’s ultimately what operations need to figure out over time.”
The following panel discussed overcoming key obstacles to forming effective strategic partnerships, which concentrated on deciding which functions should be outsourced, choosing the right partners and solutions, mitigating risk and enabling flexibility for future development.
One panellist opened by explaining that the back office and asset servicing are still driven by technology and operations but indicated there was room for improvement in the level of standardisation, but said the industry was “not there yet”.
A representative from an asset management firm said asset managers are being “squeezed in the middle which brings massive challenges”, and further indicated that standardisation is about introducing flexibility without the cost.
Another panellist explained that it’s a question of “how we can make business more portable. The current buzzwords are big data and data lakes which allow clients to change up front without worrying about what is going on in the engine room.”
Another speaker suggested that if you have the investment and support there, clients won’t go, they will stay. We always want our clients to stay and they don’t really want to move.
They added: “We are getting better at working out who the better partners are through fintech scanning. We can identify who are the best partners in fintech and who is best for us and our clients in terms of costs—who could help solve specific regtech or know your customer underlying problems, for example.”
The panel ended the discussion with a mention of environmental, social and governance,
to which one panellist said, the topic is not going away.
He commented: “It’s here, it’s more and more a question of sustainability, not just around our business, say the carbon footprint of your CEO and executive board, for example, but it’s also about where you’re outsourcing to.”
He added: “If you’re outsourcing to a low-cost centre, perhaps somewhere in the developing world, and it’s not powered sustainably, that’s also a question to consider.”
The panellist explained that there needs to be more efficiency in operations roles to free up the capacity of people available, who could be doing more in other areas.
Another panellist said, in order to explore these opportunities, there needs to be a collaborative notion within a firm that every transition requires “a mindset change, and sometimes it’s not an issue to experiment and fail”.
The panellist indicated that experiments are needed and are required to make a successful pace in production of asset servicing models.
He advised that a business should have the traditional management side of its business running parallel with the data/technology and operations side.
He cited: “If you want to see smart analytics and good collaboration leave the operations people to work on their own solutions.”
Another panellist advised firms to share decisions globally “depending on the scale of your organisation. Look for scale, a global vision.”
The moderator then asked the panel if they thought they would be replaced by robots, to which one panellist said: “No, it may be more technology-based, but there will probably be fewer operations people.”
Another concluded: “You don’t pay for your back-office, ultimately your customer does, you have to demonstrate and evidence your choices. You also have to work out the costs for those choices and services and make sure they are appropriate in terms of value. That’s ultimately what operations need to figure out over time.”
The following panel discussed overcoming key obstacles to forming effective strategic partnerships, which concentrated on deciding which functions should be outsourced, choosing the right partners and solutions, mitigating risk and enabling flexibility for future development.
One panellist opened by explaining that the back office and asset servicing are still driven by technology and operations but indicated there was room for improvement in the level of standardisation, but said the industry was “not there yet”.
A representative from an asset management firm said asset managers are being “squeezed in the middle which brings massive challenges”, and further indicated that standardisation is about introducing flexibility without the cost.
Another panellist explained that it’s a question of “how we can make business more portable. The current buzzwords are big data and data lakes which allow clients to change up front without worrying about what is going on in the engine room.”
Another speaker suggested that if you have the investment and support there, clients won’t go, they will stay. We always want our clients to stay and they don’t really want to move.
They added: “We are getting better at working out who the better partners are through fintech scanning. We can identify who are the best partners in fintech and who is best for us and our clients in terms of costs—who could help solve specific regtech or know your customer underlying problems, for example.”
The panel ended the discussion with a mention of environmental, social and governance,
to which one panellist said, the topic is not going away.
He commented: “It’s here, it’s more and more a question of sustainability, not just around our business, say the carbon footprint of your CEO and executive board, for example, but it’s also about where you’re outsourcing to.”
He added: “If you’re outsourcing to a low-cost centre, perhaps somewhere in the developing world, and it’s not powered sustainably, that’s also a question to consider.”
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