New whitepaper discusses the role of operating models in unlocking new levels of efficiency
Milestone Group, the specialist provider of optimised fund processing solutions to the global funds industry, is calling for a rethink on operating models in the sector. In a newly-published whitepaper, entitled Efficient fund operations: the dynamic operating model, it argues that there is a mismatch between current operating models and the product flexibility required by today’s markets – and highlights the significant scale of efficiencies achievable in this area.
Geoff Hodge, Milestone Group CEO explains: “Operating models have typically developed along functional lines, but product maturity, regulatory demands and margin pressure mean that this approach no longer supports the business adequately. Traditional operating models are simply not equipped to deliver the transparency, efficiency and agility that today’s firms need – and that’s a problem for the industry in the highly competitive current environment.
The paper highlights the risks of unintended consequences if operating model design is disconnected from real-world requirements. For example, an operating model that delivers a low unit cost but is unable to support the business’s real requirements in terms of transparency, SLAs, agility levels and quality.
It argues that the recent trend towards offshoring and distributed processing models can have a negative effect on service levels and presents inherent challenges relating to ‘line of sight’, process status, time zone, client and regulatory reporting, compliance, and data management if not handled within a dynamic operating model.
“The answer is to reengineer the operating model with the fund product at the heart of it,” Hodge added. “A fund-centric operating model can be dynamic, giving companies the confidence that they can support today’s business as well as future needs that are both predictable and as-yet unknown. We have seen the rewards that such a rethink can deliver, and they can be transformational.”
The paper is the second in a series of three exploring efficiencies in fund servicing.