MARKET INFRASTRUCTURE

Northern Trust: Impact of regs hitting fund managers as tech options snubbed

A majority of surveyed fund managers feel regulation will take up more of their time in the next year but not as many are deploying technology in response.

By Paul Walsh paul.walsh@strategic-i.com February 15, 2017 12:34 PM GMT
The upcoming regulatory environment will demand more time from fund managers compared with time spent over the previous year, according to Northern Trust.

In a recent survey of 100 fund manager clients, prospective clients and consultants attending a Northern Trust event, nearly 70% believed upcoming regulations would demand greater time resources.

In spite of a clear increase in time required to ensure regulatory compliance, 60% of those surveyed had also not considered utilising technologies such as big data, robo advisors and cognitive computing to aid compliance.

“Whilst the time spent complying with new regulation remains one of the greatest challenges for fund managers, it is not surprising to find many fund managers grappling with the costs and additional infrastructure investments required to implement new technologies,” said Robert Angel, global head of regulatory solutions at Northern Trust.

Angel also stated that cloud-based technologies have the scale to support fund managers in regulatory compliance.

Recent industry coverage has focused on how capital markets are increasing their willingness to incorporate cloud-based technology into their operations.

Research firm Celent revealed in December 2016 that cloud-based services had reached a ‘tipping point’ and are set to be the main delivery model for key industry functions.

Findings revealed that cloud is offering firms a more agile infrastructure enabling participants to address changing regulatory requirements, the proliferation of trading applications as well as the need to rapidly connect to multiple liquidity sources.