Posted: 14/10/2023 | Read time: 3 minutes
Asset management firms are currently navigating many industry changes and challenges.
According to a recent PwC survey, firms face market volatility, high interest rates, and pressure on fees. These conditions could see one in six firms ‘swallowed up or fall by the wayside in the next five years.’
Asset managers tend to focus on areas visible to clients – or where they directly benefit. This often means they overlook the back office.
But better asset management operations can determine financial success amid cost pressures.
This blog explains how you can improve your asset management operations. Click the link below to jump to a section:
- What are the benefits of improving asset management operations?
- What are the common challenges affecting asset management operations?
- How to improve your asset management operations – in 2 steps
What are the benefits of improving asset management operations?
Improving your back office will cut operational costs and improve efficiency. You’ll save time by removing repetitive manual work. This will also help you boost staff satisfaction and retain talented employees.
Enhancing your operations also makes it easier to comply with regulations. You’ll reduce your risk of breaches while enhancing controls and simplifying audit processes.
What are the common challenges affecting asset management operations?
In the UK, the FCA has introduced several new and updated regulations. Recently, these have included IFPR and Operational Resilience, which came into force in early 2022. Firms must also comply with Consumer Duty rules, which came into force on 31 July 2023 and have had a significant impact on the industry.
These new demands are on top of the ongoing need to meet CASS requirements. For 98% of professionals, CASS compliance is a significant focus for their senior management teams.
The launch of the T+1 settlement in the US – with the UK set to follow suit – will also place additional demands on back-office teams.
These requirements become more challenging when firms underinvest in back-office operations. The same is true for firms tied to legacy systems.
Relying on manual processes places an enormous burden on operational teams. Firms using spreadsheets will experience more breaks and spend more time investigating and resolving items. Operations will be inefficient and more exposed to human error and risks.
Using spreadsheets also limits a firm’s ability to scale. This problem compounds as data volumes increase. Firms, therefore, need to prepare processes to meet demand in the future.
How to improve your asset management operations – in 2 steps
- Review your operations
The first step to improving your operations is to review the tasks completed within departments. Your organisation must assess its processes and identify areas where improvements are necessary.
Recognise where issues might arise – for example, if transactional volumes increase. This ensures that processes can handle any risk or harm in the future. The key here is futureproofing processes to meet business growth.
Prioritise and address areas that would benefit most from investment. This is usually where there’s an overreliance on manual tasks.
- Automate your back-office processes
Automation is the best way to improve areas where inefficiencies exist. Manual processes are unsuitable for the modern global economy. They increase risk, waste resources, and make operations less efficient, contributing to rising costs.
The first stage of automating processes is establishing your goals and what you need from an automated tool.
Reconciliations are the foundation of operational departments and are historically tied to spreadsheets. This, therefore, offers a key automation opportunity. The best reconciliation platforms consume data from any source and automate the process from end-to-end. So all your team has to do is manage breaks and reporting.
You can find out the must-have features of an automated reconciliation solution here.
Most providers will offer free demonstrations of their platform. These are a great way to find out which solution is right for your business.
The AutoRek solution automates the reconciliation solution from end-to-end. It improves operational efficiency, saves time by 90%+, and cuts costs by 50%+. See it in action in just 3 minutes. Or book a free, no-obligation demo with a member of our team.