Confluence, a financial technology firm, has found that asset managers are prioritising automation in their back offices in light of regulations stemming from the 2008 financial crisis.
A survey of 192 asset managers shows the priority has shifted since 2008 from automation in the front and middle offices, to the back office now.
Todd Moyer, executive vice president of global business development at Confluence, said the firm’s ‘Asset Management Industry Trends Survey’, which has been conducted annually since 2008, found that 61% of asset managers cited automating back-office processes as an important goal over the next two years.
Moyer told Funds Europe that back-office operations had been ignored in periods like 2008, 2010 and 2012 in favour of revenue-generating front- and middle-office services.
Beyond back-office automation, it was managing multiple regulatory reporting requirements simultaneously (47%) and centralising fund data (44%) that were the second- and third-most cited goals.
Nearly three-quarters of respondents said it was important to consolidate fund data into a common database. “Numbers showed that those worried about data consolidation has doubled [since the first survey],” said Moyer.
“Now post-Dodd Frank and the AIFMD [the Alternative Investment Fund Managers Directive] there is a plethora of challenges. There is pressure to comply in various regulatory jurisdictions,” he said.
Touching on a point related to how firms will automate, Moyer said that using legacy systems would create “winners and losers” and that winners would be those who took a less fragmented approach to handling data due to automation. They would “view data as an asset”, he said.
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