Fund Administration Technology Comes of Age in 2013
January 9, 2013
Growth in Cloud Computing and Financial Services Technology Leads to Greater Customization and Delivery Speed
(Pittsburgh, PA - January 9, 2013) In 2013, global demands for instant access to customized data in an evolving asset management industry will further drive fund administrators' growing need for cloud technologies and automated processes, according to Confluence, the industry's leading provider of data management solutions. As asset managers face an increasing number of data-driven demands from regulators and investors, they will be compelled to adopt new technologies with enhanced speed and frequency in 2013. The result: a "coming-of-age" period for fund administrators.
"This year marks a pivotal time for the adoption of technology in the fund administration back office," said Skip Smith, EVP of Product Development for Confluence. "Fund administration technology is coming of age and will provide forward-looking fund administrators with a strategic competitive edge."
Confluence sees 2013 as pivotal year for fund administrators in three areas:
- Industry to Close Technology Gap on Expense Processing for Greater Efficiency, Accuracy and Control.
Fund boards and investors today require a microscopic view of fund expenses. With an intensified focus on expense analysis and cost control, fund administrators are challenged to provide increased transparency, precision, and efficiency, and fund boards are challenged to control expenses. These demands have rendered standard approaches to expense processing that rely on spreadsheets and manual processes obsolete.
Confluence predicts that 2013 will be a pivotal year in which fund administrators abandon outdated, error-prone manual processes and spreadsheets in favor of automated expense processing systems. In the new automated age of expense processing, fund administrators will be able to increase the levels of transparency, accuracy and responsiveness while significantly improving efficiency of their operations. While most large fund companies can manage expenses for 35-50 funds per person, expense automation has the potential to allow one person to process expenses for up to 100 funds.
- Explosion in Financial Data and Demands for Data Access Presents Huge Challenge for Industry.
In recent years, the financial industry overall has needed to find ways to deal with the explosion of data in business and the world at large, as well as the requests often placed on that data. The amount of data available in the world is growing at a rate of about 50 percent a year, or more than doubling every two years, estimates IDC, a technology research firm. With so much growth in data, fund administrators specifically now find themselves overwhelmed not only by the incoming flow of information, but also the increasing demands that regulators and investors are placing on those streams. In response, the industry will need to abandon antiquated spreadsheet methods and adopt innovative technological solutions.
- Cloud Technology Pushes Fund Administrators into the Future.
As asset management has evolved with an increasing focus on the investor and transparency, round-the-clock data availability and control are clearly key differentiators for remaining competitive. With the proliferation and improvement of cloud technologies – especially through the Software as a Service (SaaS) delivery model – fund administrators now have the tools they need to work smarter for their clients, and in turn, drive business objectives.
SaaS is a widely recognized core component of the future IT landscape and market share in enterprise applications and adoption is expected to grow significantly in the coming years. The overall SaaS market will increase three-fold to $92.8 billion by 2016, according to a 2011 study by independent research firm Forrester Research.
For fund administrators, the availability of cloud-based applications will allow for greater global scalability, accessibility and flexibility in their outsourcing options. With cloud-based applications, the job of deploying an application and keeping it running from day to day—managing upgrades, monitoring performance, ensuring high availability, and so forth—becomes simpler. By relieving fund administrators of the IT burden they can focus on what matters most – their business.
"In past years, we've seen fund administration technology grow and change due to economic issues and regulatory needs. While these remain concerns for fund administrators, it's clear that this year is really about how fund administrators can use technology to better prepare manage their data and prepare for the future," said Smith.
Confluence is a global technology solutions provider delivering innovative products to the worldwide money management industry, to meet asset managers’ and service providers’ performance, reporting, analytics, risk and data needs. With the recent acquisition of StatPro, Confluence offers its clients a broader range of data-driven managed investment solutions including post-trade regulatory and shareholder reporting, performance and attribution, portfolio analytics, and asset data services and data management, delivering a full technology suite to the front, middle and back office. Headquartered in Pittsburgh, PA, Confluence serves the international fund industry with locations across Europe, North America, South Africa, Australia and Asia.