Automating Middle and Back Office Functions to Streamline Investment Operations
February 10, 2016
According to a 2014 Asset Management Industry Trends survey conducted by Confluence, 61 per cent of managers were eyeing to replace manual middle and back office operations with automated technology. The factors driving this goal are plain and simple: to provide accuracy of data, and to speed up processes.
"The financial industry has moved from a position of the workload being from something they can cope with to something they need to address," said Confluence’s EVP of global business development Todd Moyer. "
94 per cent of 96 asset managers surveyed shared that they were worried about how manual processes could affect their ability to detect errors in the back office. Without automation, these managers explain that meeting regulatory reporting deadlines seem impossible.
Asset servicing firms are now able to address these concerns by offering an automated process flow which captures an audit trail to deliver additional transparency and insight. Some of the important middle and back office functions which can now be streamlined by an advanced platform are the following:
Risk management. Top of the line solutions offered by select third parties can now present portfolio level analytics including performance attribution and risk metrics across real-time and historical inquiries. This helps asset managers to address concerns as soon as possible and prevent risks from developing into huge problems that could hinder financial growth.
Financial accounting. Following the investment scandals during the financial crisis are the stricter rules imposed by regulatory bodies when it comes to accounting. To comply with these demands, advanced cloud-based technology platforms can now perform daily security and cash reconciliation across multiple custodians, trade break reporting and resolution, bank account reconciliations, and monthly investor statements. Preparation of GAAP and IFRS-compliant annual financial statements is also made light and easy with the help of technology.
Tax services. By 2020, investors will expect efficient tax infrastructure and will have minimal tolerance of tax uncertainty or adjustments, according to PwC. As a result, total transparency of investor residency and identity will be crucial. Through a platform and a dedicated team, some of the tax services that can be quickly provided include the preparation of investor tax reporting, preparation of federal and state income tax returns, and maintenance of tax capital accounts and investment roll forwards.
By leveraging competitive tools which automate middle and back office processes related to asset management, investment operations are expected to become more efficient and compliant with regulatory deadlines now more than ever.
"The financial industry has moved from a position of the workload being from something they can cope with to something they need to address," said Confluence’s EVP of global business development Todd Moyer. "
94 per cent of 96 asset managers surveyed shared that they were worried about how manual processes could affect their ability to detect errors in the back office. Without automation, these managers explain that meeting regulatory reporting deadlines seem impossible.
Asset servicing firms are now able to address these concerns by offering an automated process flow which captures an audit trail to deliver additional transparency and insight. Some of the important middle and back office functions which can now be streamlined by an advanced platform are the following:
Risk management. Top of the line solutions offered by select third parties can now present portfolio level analytics including performance attribution and risk metrics across real-time and historical inquiries. This helps asset managers to address concerns as soon as possible and prevent risks from developing into huge problems that could hinder financial growth.
Financial accounting. Following the investment scandals during the financial crisis are the stricter rules imposed by regulatory bodies when it comes to accounting. To comply with these demands, advanced cloud-based technology platforms can now perform daily security and cash reconciliation across multiple custodians, trade break reporting and resolution, bank account reconciliations, and monthly investor statements. Preparation of GAAP and IFRS-compliant annual financial statements is also made light and easy with the help of technology.
Tax services. By 2020, investors will expect efficient tax infrastructure and will have minimal tolerance of tax uncertainty or adjustments, according to PwC. As a result, total transparency of investor residency and identity will be crucial. Through a platform and a dedicated team, some of the tax services that can be quickly provided include the preparation of investor tax reporting, preparation of federal and state income tax returns, and maintenance of tax capital accounts and investment roll forwards.
By leveraging competitive tools which automate middle and back office processes related to asset management, investment operations are expected to become more efficient and compliant with regulatory deadlines now more than ever.
Posted by Louie Drake. Posted In : Finance
