Reporting In: why manual middle office reporting just won’t cut it anymore

Date: April 7, 2016

Historically, investment updates have been provided through monthly reporting on paper, especially at the institutional level. 

But, as technology has advanced, the opportunity for asset managers to report daily has become the norm.

In other words, middle office reporting is no longer a static internal customer service activity that happens via a PDF once every month. And it’s not just about having an online portal to download the same static PDF reports. The future of reporting is about providing tailored interactive data and analytics to anyone.

This isn’t just a “nice-to-have”. Increasingly, investors expect and demand the data faster, presented in a way that it is tailored to their specific needs.

In short, effective and more dynamic reporting has gained business critical importance and provides real, strategic value for asset managers.

21st Century Reporting

Typically, leading asset management firms looking to improve their middle office reporting capability are:

  • Eliminating manual and ad-hoc processes to create a system that is more agile in its ability to report analytics on a daily basis.
  • Developing the capability to turn that data around and present it to investors in a transparent and user friendly way.
  • Allowing a degree of user flexibility so that investors can customize their reports and flex them to meet their own analytical needs.
  • Reducing middle office process risk by automating reporting processes and providing a better client experience.

“People are becoming used to customization in other aspects of life, and will expect it in the management of their assets. Changes in the industry are creating opportunities. This demand for customized solutions will form the next big trend in the investment industry.”

The Importance of Reporting and Communication

As a survey of over 1,700 major investors by Chatham Partners suggests (referenced in Asset Management: Reinventing Reporting For the New Era of Transparency and Compliance) reporting capability and information share are now major considerations:


Top 5 priorities in client servicing:

  1. Market/investment knowledge of portfolio team
  2. Clarity of investment reports
  3. Problem resolution skills of client service representative
  4. Frequency of contact of client service representative
  5. Timeliness of investment reports

The authors of the Reinventing Reporting whitepaper suggest this is largely down to the current need to restore investor confidence in the wake of recent extreme events such as the global financial crisis, Madoff scandal, and Eurozone debt contagion.

Within this context, investors now need:

  • A better understanding of the portfolio’s risk exposure.
  • Adaptable allocation strategies that allow taking advantage of global investment opportunities.
  • Self-help analysis tools for analyzing impact of unfolding economic events on the portfolio.
  • Increased transparency and granularity in reporting.
  • A sharper focus on client servicing.

Some of the technology implications of providing this level of service include:

  • Demand for aggregated client-level views with transparent reporting on individual holdings and transactions.
  • Advanced analytics and data cubes that support real-time, ad hoc analysis.
  • Multiple channels for consuming data, anytime, anywhere.

A question of trust

Being able to create customized reporting – and communicating change earlier to clients – is the start of a proactive strategy to maintain trust. Clients need to be comfortable with the information they are presented with and technology that is agile, automated and able to add and delete fields, over a variety of channels according to client needs is where the industry needs to go.

“Innovation involves a lot more than just launching new products. It could be a new approach to investing, a new service, or a better operational process. Good innovation is ultimately about improving clients’ experience.”

What’s more, delivering a variety of information over the investor’s device and medium of choice is a powerful way to add value and is fast becoming a strong differentiator for any efficient middle office, whether that is a PDF or Excel document, online interactive reporting on a PC or via a tablet or smartphone.

Excellence in reporting capability underscores investor trust, confidence and engagement. It builds and maintains relationships, not just for performance and risk management but as a strong indicator of customer focus and customer care.

Shirley Brent of Gabriel Research and Management sums up the situation neatly, saying that from dealing with clients frequently, a common observation is that when reporting is more precisely configured to client needs, then is can make those clients feel good about investing with you – meaning valued as a client and in safe hands.

Think Big

Creating a customizable reporting function that is automated also gives the asset manager scalability. This brings about operational efficiency at a time when margins are under pressure.

As PwC points out in Asset Management 2020: A Brave New World: “Fund distributors will have stress on their resources in the years to 2020; therefore, the skills required for an increasingly complex and resource-intensive distribution landscape will test the industry’s best.”

In fact with the client now dictating output, the challenge has become not just balancing the requirements of clients against the nice-to-have requests, but actually having access to the requisite manpower, skills and technology.

In brief

The future of client reporting lies in the hands of tech-savvy, transparency demanding investors where real-time access, customization and interactivity are king. Internal demand and tighter industry regulation are two additional (fundamental) reasons why old-fashioned Excel spreadsheets just won’t cut it anymore.

The extent to which asset management firms recognize and embrace this change  in middle office reporting will distinguish future operational efficiency and the ability to compete in tomorrow’s market.

Middle office reporting takeaways:

  • Middle office reporting is no longer a static internal customer service activity
  • Excellence in reporting capability underscores investor trust, confidence and engagement
  • Investors today are more switched on to technology and increasingly look for real-time access, customization and interactivity.


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