A recent webinar held by SimCorp, a leading provider of investment management solutions and services to the global financial services industry, in collaboration with Adox Research, a prominent technology research and advisory service, revealed that 79% of participants report at least 9% of inbound data in their front office is broken and requires manual repair. Out of this, 17% report that more than 20% of their data requires attention. The findings offer important insights into the technology challenges buy and sell side firms are currently facing.
The ’Follow the Money’ survey was conducted by Adox Research between December 2016 and January 2017. It engaged with over 100 technology buyers, 59% residing in either the US or UK. Participants were surveyed on processes within, and budgets related to automation across the trade lifecycle.
Amongst the most significant findings were issues of data fragmentation and lack of automation:
- 47% of participants stated their trade execution flows had automation levels below 60%. This increased to 63% of participants reporting the same low automation levels across Portfolio Management & Risk, signaling a need for increased automation in the front office.
- Close to 40% of all core investment data in the front office is spread across 10 or more databases. This covers customer, instrument, and transaction databases, and illustrates the technological complexity of a fragmented front office environment.
Current IT budgets and the appetite for investment in order to replace inhibiting legacy technology are increasing:
- 64% of those surveyed plan to be either adopting or replacing their order management systems over the next three years.
- 54% of firms plan to increase their spend on order management systems, and 67% will increase spending on portfolio modeling and risk analytics.
Brent Rossum, Director, Front Office Product Management at SimCorp explains: “It is perhaps not surprising, given the sheer abundance of legacy technology, that firms are feeling the strain. Fragmented infrastructure, manual reconciliation, and lack of automation are big concerns. There is a real mind-shift required in order to overcome them; adopting integrated systems that have scalable capabilities across the front, middle and back office. At SimCorp, our clients have followed this best practice and benefit from greater efficiency and operational agility, which means they can focus on their real job; investment performance.”
The webinar, hosted by SimCorp and conducted by Gert Raeves, Founder and lead Reseach Director, Adox Research, focused on these front office results within a larger survey, providing best practice guidance. To view the webinar, please click here.
SimCorp provides integrated, best-in-class investment management solutions to the world’s leading asset managers, fund managers, asset servicers, pension and insurance funds, wealth managers and sovereign wealth funds. Whether deployed on premise or as an ASP solution, its core system, SimCorp Dimension, supports the entire investment value chain and range of instruments, all based on a market-leading IBOR. SimCorp invests more than 20% of its annual revenue in R&D, helping clients develop their business and stay ahead of ever-changing industry demands. Listed on NASDAQ Copenhagen, SimCorp is a global company, regionally covering all of Europe, North America, and Asia Pacific.