While managing through these challenging times, your business is likely also looking toward the future. With “business as usual” upended, you may be trying to position your firm for whatever comes next while staying ahead of your competitors.
Much of this re-evaluation is a result of remote working models mandated by the pandemic. Many firms with local deployments struggled to ensure the continuity and availability of their internal operations in order to meet deliverables and commitments. These firms are now investigating ways to strengthen their operational processes and concurrently double down on their core competencies—to build and broaden client relationships and excel at unique investment and financial strategies that differentiate their shop from others.
To free up time and resources committed to front-, middle- or back-office operations, vendors can handle a range of services on behalf of customers and serve as an extension of the client firm’s operations. An important but routine operational area to outsource potentially is data services, including reconciliation. Vendors, such as SS&C, can collect, aggregate, normalize and cleanse data; reconcile data from multiple sources; identify and remediate exceptions; and deliver ready-to-use data to your systems for you. As a result, firms that outsource managed data services meet all their operational needs and reap additional benefits:
- The outsourcing team collects and normalizes disparate custodial data across positions, transactions and cash, and resolves data gaps.
- Consolidated and standardized market data and corporate actions from a single source alleviate dealing with multiple parties and formats. Data accuracy rises.
- A good vendor will deploy built-in reconciliation rules to automate the matching process and identify breaks early. Automation negates error-prone manual input.
- Critical data including holdings, transactions and cash are reconciled daily to custodians/third parties, which ensures data is in sync between applications and third parties. Trading risks fall.
- The team provides clients clear insight into matches, breaks and research notes on differences. Clients gain results-driven actionable information.
- Timely exception resolution ensures more informed decision-making and increases risk mitigation.
- The outsourcing team maintains the reconciliation process for new accounts, rules changes, custodian changes, and so on, including exceptions research and analysis, either directly with the counterparty/custodian to resolve or escalate to the client.
- Opting to outsource activities like reconciliations effectively outsources the task of keeping up to speed with the most efficient technology, making this a compelling option for firms choosing to focus exclusively on core competencies or those with limited resources.
- Working with one vendor with the competence, technology and capabilities to take on components or even your entire business can slash the cost, risk and time spent on projects.
- Outsourcing managed data services fosters scalability and easily adapts to increased volumes.
For many firms, the time to outsource operational components is now. Profits and AUM may fall while clients’ expectations and competition will continue to rise. Wealth and asset managers need to deliver more value for the same costs.
If your asset/wealth management business is reviewing your operating model and evaluating process improvements, let us show you how SS&C’s custodian data collection and data aggregation, market data and our reconciliation tools, along with our outsourcing services can help you stay ahead of your competition. For more information, contact us.
Asset Management, Wealth Management