Asset Managers and Admins See Urgency for Automation, Finds Confluence

Nearly all respondents, 94%, in Confluence’s 2014 Asset Management Trend Survey said they are concerned that manual processes might affect their ability
to control errors in the back office, and 83% also said they are concerned about manual processes affecting their ability to meet reporting deadlines.
By Jake Safane(2147484770)
Nearly all respondents, 94%, in Confluence’s 2014 Asset Management Trend Survey said they are concerned that manual processes might affect their ability
to control errors in the back office (up from 85% in 2010), and 83% also said they are concerned about manual processes affecting their ability to meet reporting deadlines.

The survey, conducted in collaboration with Candice Bennett & Associates, was compiled from 96 online interviews, approximately two-thirds of which were with asset managers and the other third consisted of third-party administrators.

As the industry faces the concerns stemming from manual processing, nearly two-thirds of respondents also said that replacing these processes with automated technology was their most important goal during the next two years. However, this answer has barely changed over the years, with 61% saying so this year, 60% in 2010 and 62% in 2008.

Yet Todd Moyer, executive vice president, global business development at Confluence, thinks that while the numbers with these concerns have been high for awhile, there is now a sense of “urgency that [firms] need to do something different. I don’t think efficiency alone is a selling point to get rid of these processes. I think it’s really the volume of data requests and the increasing changes since the regulations have now [started coming into effect].”

When asked “What is the one back-office challenge that concerns you the most on a daily basis?”, the most common response in the survey was data accuracy/consistency challenges (22%), and several other responses such as managing increased client reporting and regulatory reporting demands (10% and 8% respectively) feed into the issue that firms struggling to meet the increasing volume of data they have to handle.

Part of the data problem, says Moyer, is the high levels of technology fragmentation within companies.

Nearly four out of five respondents, 78%, said that their firm uses multiple third-party solutions to support their back-office operations, and among these firms, many agreed on the benefits of consolidation: 76% said they would achieve higher operational efficiency through a common user interface, 55% said it would streamline regulatory and investor reporting, and 48% said it would reduce costs.

Furthermore, 87% said that consolidating fund data into one common database was important for their firm, yet 38% of respondents have not begun consolidating their fund data.

“Over the next 24 months you’ll see decisions getting made. So I think the numbers of people that are still concerned about these things will hopefully decrease,” says Moyer.

“You’ll see platforms continue to be a significant portion of the spend and of the urgency of these back-office firms. Coming up with that golden source of data and showing that they have a reusable model to meet those needs is going to be incredibly important for their success,” he adds.

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