A radical rethink of investment decisions in fund administration technology is needed, according to optimised fund processing solutions provider Milestone Group.
It has published a white paper that explores the “inherent limitations in traditional investment decision models” that prevent firms from achieving transformational efficiency gains in fund administration operations, said Milestone Group.
The white paper is entitled Efficient Fund Operations—Decision Making for a Leaner Future. It discusses how a new approach to decision making can “unlock a level of efficiency that is often sought, but frequently believed to be out of reach”.
Milestone Group said: “It considers how technology-driven transformational investment projects can be protected from short-term market changes resulting in shocks to revenue, by placing the decision making process in the broader context of non-financial costs and benefits and a longer term investment time horizon.”
“The funds industry has faced extreme and rapid change in recent years,” said Geoff Hodge, the CEO of Milestone Group and the white paper’s author. “This is no longer a passing trend but the new normal. The industry needs to recognise that to achieve sustainable profitability in an ever-changing market, the traditional investment decision making models must be reviewed.”
He added: “The current climate makes it critical that any investment in operational change produces an operating model that enables the business to remain competitive, whatever the market conditions. Demand for transformational change in fund administration will therefore be best served by a deeper and more flexible approach to analysis of costs and benefits associated with investment decisions.”
The new white paper is the first of three that will examine the role of operating model design and technology investment in achieving efficient fund administration.
