The industry is facing “so much cost pressure and the back office is absorbing it”, according to a panellist at this year’s FundForum in Copenhagen.
In a panel discussing the pressures driving operating model transformation, one speaker indicated that the biggest pressures for the back office consisted of cost, as well as dealing with fee compression and the expansion of the industry in China producing competition.
The panellist explained that the dashboarding of activities, as well as better transparency of data, is needed to help with these pressures.
Another panellist went on to agree that the back office faces the most cost pressures.
He said: “Asset owners need to understand they cannot have it all, some asset classes do require higher fees. We are under lots of pressure. Everyone wants real-time data. We have the pressure of both cost and time.”
“It’s important that the front-office collaborates with the back-office more often. For example, if you take collateral management, it’s now such a complex process with more involvement from the front office. Collaboration is key”, he added.
The moderator asked what else needs to change, to which one panellist said she couldn’t believe that “in this day and age, reconciliation is still manual”. She said: “I understand the cost of automation is still high, but we need to change that.”
The moderator concluded the panel by asking how outsourcing can help with the simplification of data.
One panellist suggested that it’s “extremely important to look at a collaboration of data and data quality”.
Another added: “If you don’t have clean data it's difficult to outsource, the reports or services you’ll get will not be good. Outsourcing is the way forward to open up and create scale and scalability. A complex target operating model doesn’t always help simplify things. Scalability will create a core focus for your business.”
