In the wake of the tumultuous post-COVID years, it’s not surprising that many asset managers are eager to migrate to a service provider’s robust operating model and reduce the risks and overhead of maintaining their existing operations. As a result, there has been a significant increase in outsourcing deals initiated from the corner office, with decisions being reached before thorough due diligence has been completed. However, when it comes to due diligence for middle office outsourcing, there really is no “fast pass.”
Agility is a critical characteristic for asset management operations teams and is defined by their ability to adapt and flex their operating model to absorb change resulting from the following:
With the growing desire to simplify operating models and reduce technology footprints, asset managers are assessing multiple paths of transformation to enable profitable growth. As was noted in Single Platform: Next Logical Evolution for Asset Managers?, recent developments and acquisitions have promoted advanced capabilities and introduced various new forms of front-to-back, ‘single platform’ solutions to the market. As a result of these advancements, rather than addressing a singular point of failure or concern (such as a new IBOR or OMS consolidation), firms are considering broader evaluations of their operating environments with the hope of achieving greater scale, nimbleness and data empowerment across their enterprise.
Olmstead’s latest perspective “The Race is on: Acquisitions and the Evolving System and Service Landscape”, reviewed the recent press regarding single platform (front-to-back) solutions; some having been enabled via strategic acquisitions and others developed over time as an intentional build. As a result, asset managers have found themselves with more questions than answers, primarily – is the front-to-back single platform concept the next logical evolution?