The FundGuard team spent a few days in Washington D.C. last week, attending the ICI Leadership Summit. This was the second year for the Leadership Summit, and it did not disappoint.
The dynamic lineup of speakers delivered diverse and thought-provoking ideas for how the industry can navigate current and future state challenges and opportunities. Consistently heard across every conversation was, to quote the Day 1 fireside chat, “Evolving leadership trends in a time of uncertainty, the power of technology driving the future of the industry, and the need to keep strengthening our focus on investors.”
It was clear across the two days of debate and discussion that we have reached the perfect storm for true transformation across the industry. We are all committed to facilitating safe and efficient asset growth for all investors, but to meet that commitment, along with the expectations of regulators across the globe, a systemic technological evolution is needed to transform investment operations.
Cloud Technology is Central to the Operating Model of the Future
As we outlined in our summary of the InvestOps US event earlier this year, central to the operating model of the future is cloud technology, which brings incredible new opportunities to the asset management industry and can be the driving force of positive change. Lest we drink too much of our own Kool-Aid, we asked for an assist from ChatGPT to underscore the value we are already seeing from emerging cloud technologies.
Scalability and Flexibility
The elastic nature of cloud computing enables easy expansion or contraction of computing power, storage, and data processing capabilities. This scalability and flexibility support the evolving landscape of investment operations and accommodate changing business requirements across asset classes and jurisdictions.
Eliminating or reducing the need for on-premises infrastructure and associated maintenance costs creates considerable cost efficiencies. With the cloud, firms can eliminate the upfront capital expenditure traditionally required for hardware and software purchases, making it more accessible to smaller firms and startups.
Data Management and Analysis
In an industry burdened by never before seen volumes of data, cloud technology provides powerful data management benefits, including storage, processing, analysis and manufacturing capabilities to facilitate more efficient operations, sophisticated investment research, insightful risk analysis, differentiated portfolio management and reliable compliance reporting.
Collaboration and Remote Work
Cloud technology enables seamless collaboration and remote work capabilities so that teams can safely access data, research, and portfolio management tools from anywhere, fostering collaboration across geographically dispersed teams. Cloud-based collaboration platforms also facilitate secure document sharing, version control, and real-time communication among team members and external stakeholders.
Access to Innovation and Advanced Technologies
Cloud providers continually invest in cutting-edge technologies and innovations. Asset management firms leveraging cloud technology can benefit from advancements such as machine learning, artificial intelligence, natural language processing, and big data analytics.
Regulatory Compliance and Security
Public cloud providers maintain robust security measures and compliance certifications, meeting stringent regulatory requirements. By leveraging cloud technology, firms can offload some of the security and compliance responsibilities to trusted cloud providers. Cloud services typically offer data encryption, access controls, audit trails, and disaster recovery capabilities, enhancing the security and protection of sensitive client data.
Business Continuity and Disaster Recovery
Cloud technology ensures business continuity by providing redundant and geographically distributed infrastructure. Asset management firms can leverage cloud-based disaster recovery solutions to replicate data and applications across multiple regions, minimizing downtime and ensuring data resilience in the face of unforeseen disruptions.
Integrations and Ecosystems
Cloud technology fosters integrations and interoperability through APIs and connectors. Firms can seamlessly connect their cloud-based systems with various data sources, market data providers, custodians, trading platforms, and third-party services. This enables efficient data flows, streamlined workflows, and access to a broader ecosystem of financial services and technology providers.
By embracing cloud technology, the industry can enhance operational efficiency, access advanced technologies, improve collaboration, and effectively navigate evolving market dynamics and regulatory requirements. Cloud technology empowers asset management firms to focus on their core competencies while leveraging scalable and cost-effective infrastructure and tools to deliver value to clients.
Join the Transformation
Every day new and innovative technology is entering the financial services space, but much of it is attacking industry issues and operational systems from a top-down approach, e.g., improving data integration, onboarding, client reporting, info delivery, etc. As we all took away from the Leadership Summit, this is critically important but cannot be sustained in the long term without first addressing underlying challenges of why it is so difficult to manage all these requirements in the first place.
True and lasting change must start with technology that enables bottom-up modernization. FundGuard, in collaboration with our clients and industry partners, is shaping the future of investment operations by modernizing investment accounting. We are removing the pain and risk of back-office processes so that you can free up time and resources for true differentiators. Contact us to learn more and join our growing ecosystem of innovative clients and partners collaborating to transform investment operations.