SimCorp evaluates strategic considerations for selecting the optimal IT platform for regulatory compliance

28 April 2011

TowerGroup offers expert commentary in the latest SimCorp Journal on IT evaluation – new legislation will have vast repercussions for financial IT infrastructures.

SimCorp, a leading provider of highly specialised software and expertise for the investment industry, released today an industry expert roundup examining the choice of IT investment management platform for financial institutions in preparation for upcoming regulation. The article examines the implications of Dodd-Frank and UCITS IV, and the repercussions of these regulations for asset managers in North America and Europe.

The commentary, which appears in the SimCorp Journal of Applied IT and Investment Management, features contributions from leading experts in the field, including: Michael T. Dolan, Partner, Financial Services, Ernst & Young LLP, Sriram Venkataraman, Senior Manager, Financial Services, Ernst & Young LLP and Dushyant Shahrawat, a Senior Research Director at TowerGroup in the Securities and Investments practice. The article outlines how unprecedented regulatory activity and more stringent client demands have made it imperative for investment management organisations to have an optimal technical infrastructure in place that supports their growth strategy.

With Dodd-Frank set to roll-out this summer, financial institutions are increasingly in pursuit of improving transparency in the markets and facilitating the flow of information through transactions. Firms must now look into how their IT systems can support the required transparency mandated by these new reforms. The article discusses several criteria firms should use when evaluating technology platforms:

• Data Sources – Firms should look for a platform that can consolidate disparate data sources to obtain a true indication of risk exposure, as well as gain insight into liquidity, valuations and other important metrics.

• Automation – An optimal IT system will offer a high degree of automation to minimise any manual processing error that can lead to financial loss for clients and reputation damage for the firm itself.

• Frequency – A quality system should provide frequent updates to ensure robust data quality for informed decision making.

• Depth and Breadth of Coverage – Firms should pick a solution that covers all asset classes and financial instruments to ensure that new asset classes, funds and portfolios are being processed.

• Flexibility and Adaptation – The system must be able to incorporate regular changes to workflows and business processes in order for asset managers to stay on track and ahead of competition.

• Scalability – The platform needs to be able to scale to accommodate higher transaction volumes for new asset classes, funds and portfolios to ensure the organisation’s growth potential.

“Asset managers must be able to provision for new reform, but not at the expense of their growth and value creation strategies,” stated David Kubersky, Managing Director of SimCorp North America. “SimCorp understands the many challenges facing fund managers and is committed to providing enhanced technology that addresses the mounting and complex needs within the industry.”

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