What If Asset Management Could Innovate as Fast as Video Streaming Platforms?

We live in a digital world. We shop on Amazon, we stream on Netflix, and we take for granted how these platforms keep pace with our demands as consumers.

Sern Tham – Product Director, Temenos Multifonds

Constantly innovating while improving their customer experience, these ubiquitous services succeed because of the speed at which they continuously bring forward new products and features, with no interruption to their service. And this approach could be replicated into our working environment.

Compare this model to asset management for example. Currently it takes weeks, or even months, for asset managers and their fund administrators to deploy new code and support a new product launch or changes to align with new regulations.

Netflix and Amazon are doing this in minutes. Every day, their engineers deploy code thousands of times, maximising their agility and accelerating innovation.

Asset management can emulate this approach, but to achieve this the industry has to leave behind its fragmented legacy systems.

An industry burdened by legacy

The world of asset management remains burdened by fragmented legacy administration systems, often supported by spreadsheets and manual workarounds, limiting cost savings and efficiency gains and creaking under the weight of new innovations in product and distribution. In essence, sailing boats with wooden hulls and barnacles slowing us down!

Our Every Fund Survey 2018 illustrated this, with 94% of respondents feeling that innovation needs to accelerate, and 1 in 4 saying that fund administrators and transfer agencies are not currently keeping up with the requirements of asset managers.

However, in response to this sentiment, increasingly the industry is focusing on the importance of seamless integration between the investor and back office processes. This will not only achieve the ultimate in efficiency, but leverage the latest technology to deliver a step change to maximise agility and accelerate innovation. But more is needed.

A new era of agility and innovation

As technology has transformed the way we shop or watch TV, we are now on the threshold of a new phase of digital transformation in fund administration. Open technology platforms will allow a massive increase in the pace at which change and innovation can be enacted.

This move to open architecture is a move away from proprietary ‘enterprise IT’ systems which require long development and upgrade cycles. Through DevOps, changes can be continuously developed, integrated and mobilised into operations. This will reduce release cycles from months to hours, literally allowing changes to be coded in the morning and deployed in the afternoon, allowing fund administrators to quickly roll out new changes at speed.

This will be transformative for the industry. In the future, fund administrators will be able to move away from rigid release timetables and slow production cycles, introducing multiple changes in response to client requests or regulation within hours, and support new product launches in days rather than weeks.

But this transformation will require a fundamental rethink of how fund administrators leverage technology. Fund administrators need to begin asking themselves “how will I be able to compete against those that can deliver the agility and innovation of Netflix?”

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Sern Tham – Product Director, Temenos Multifonds