Accelerated by the pandemic, the way your clients and intermediaries wish to interact, partner, and buy has digitally changed. Asset Managers have responded by re-imagining their organizational selling models. The evolving external, internal, hybrid wholesaler strategy is a prime example. It is imperative that the Asset Manager’s distribution architecture – the underlying technology, data, and analytics – helps to fuel that change. To do so, our industry needs to overcome its historical ROI challenges when it comes to its distribution architecture spend.
My previous blog highlighted how transforming into a data-driven organization requires access to high-quality information from across the enterprise. Data accessibility is a top challenge because data is often spread across multiple data stores that use different technologies.
There is simply no denying that “front-to-back” is gaining significant momentum. The business case is clear: asset managers must differentiate to survive but a legacy of overly complex operating models, restrictive and costly technology, and functional silos between the front, middle, and back-office are inhibitors to executing their strategy.
Asset managers hire top talent and want to get the most out of them. To do that, they need to be given the right information, tools, and culture to be successful. This includes freeing data and promoting a data culture where decisions and changes are made according to data-driven insights. Data is a product that drives business outcomes. Success comes from cultivating the best ideas and making the best decisions based on the best available data.
Data integrity, operational risk, and firm reputation are key considerations in how a firm develops its client reporting & pitch book production processes. To protect these interests, the standard practice is to create and manage a structured data such as performance, holdings, transactions, and attributions in a single source of truth. But what about unstructured data, which accounts for at least 50% of the content in these reports and books?
The latest evolution of front-to-back outsourcing is here: A new solution to the age-old problem of data management. These offerings bring a critical new class of service to front-to-back offerings and will certainly raise the bar; the service provider will assume accountability and must get it right.
- Will service providers realize the same level of success when extending their data capabilities to clients?
- Where will the lines be drawn between the provider and the manager, what infrastructure needs to stay behind?
Only time will tell the answer to these questions, but while this evolving service model seems poised for success in solving the “data left at the doorstep” dilemma, the devil lies in the details of execution.
Not too long ago, a typical operational outsourcing project went something like this:
Olmstead’s Andy Ziegler says in our webinar “Avoiding Shiny Object Syndrome” “Firms leave all kinds of horsepower on the bench”. How does this affect firms? Firms do not maximize the potential of anyone tool in their distribution stack leaving features on the table. They also do not integrate their tools as effectively as possible, missing out on an ROI multiplier effect.
Why does this happen? This is caused by functional silos, narrow project scope, project fatigue, and a lack of data readiness
As COVID-19 accelerates the move to virtual and digital, this trend becomes more concerning and must change. A positive ROI on client communications solutions is no longer a nice to have but a strategic imperative.
So why haven’t most organizations seen the success that they originally anticipated?