Automating Client Outreach & Reporting
Within Investment Management:
How Emerging Technologies Provide a Better Solution
Whether it be standardized client statements, marketing factsheets or other investor communications, investment management firms face a myriad of challenges when trying to provide accurate reporting to clients, consultants and other third parties. Investment managers seeking to automate client outreach and differentiate themselves from their competitors through better reporting face significant obstacles that prevent the timely and accurate publishing of information. Standardized workflows and solutions surrounding reporting have become largely legacy-based, however, new approaches and emerging technologies offer greater efficiencies for an age-old problem on the buy-side.
The average investment firm utilizes a variety of different systems to generate reports and each contain their own data and formats. For example, most portfolio management systems contain some form of client statement reporting, however, these reports are often “drab,” or worse, legacy-based and can be very difficult to customize. As a result, most firms are heavily invested in inefficient, manual processes for creating their own reports based mostly on Microsoft Excel templates, which are then migrated to PowerPoint or a similar program to make the data more visually appealing and to also integrate data from outside sources. Because of this manual process, the risk of reporting inaccurate data is high and would be an unacceptable business risk, for example, if this same approach was used for the firm’s portfolio management and trading process.
As an alternative to the manual processes described above, some firms have sought to implement stand-alone reporting solutions. The result of this approach is often replacing one problem with another, i.e. moving from an entirely manual-type process to a software based approach that requires extensive resources to support and which also has the same fundamental data challenges that the manual processes had, namely, a lack of timely and accurate data. Firms that take on this stand-alone reporting/data warehouse approach often find that there is a disappointing lack of ROI when all is said and done. Because of this, firms often end up hiring additional technical staff to support these add-on systems, which defeats the purpose of achieving greater efficiency through the implementation of new software. In a SasS-based, app-based world, the stand-alone reporting/data warehouse approach is a legacy-based solution in itself and yet another system waiting to be replaced by better technology.
Solving the Data Challenge
Rather than accepting the status quo surrounding current practices, whether manual or stand-alone reporting solutions, investment firms need to think more holistically about their actual data and reporting requirements. The best analysis often involves asking back-to-basics questions such as, “Where does the firm’s data come from and where is it stored?” By asking this simple question, investment managers can embark on a more targeted and effective approach to data management and reporting. For example, if 80% of the firm’s data used in reports comes from the firm’s portfolio management system and the rest comes from other sources such as CRM, spreadsheets, or other downstream providers, rather than looking at stand-alone reporting/data warehouse-type solutions, firms should look at their incumbent software vendors for portfolio management/accounting and trading to assess whether these solutions actually provide the right tech tools that they need in order to improve client reporting and streamline investor communications. If they do not, or if such a solution is an expensive “add-on,” it is usually a sign that it may be time for a more fundamental change, rather than just implementing yet another software solution into a mix of inefficient systems.
From Data Warehouse to BI Reporting
While a legacy-based, stand-alone reporting solution is usually highly impractical and prohibitively expensive for many firms, data warehousing concepts remain important to solving data management and reporting challenges. In assessing current systems, having the ability to extend the data model and store external data used by the investment firm is a key capability that should be found in any portfolio management system and should be viewed as a basic requirement in vendor assessments. The same can be said of BI Reporting. BI, or Business Intelligence Reporting, is a critical aspect of modern technology solutions. Rather than storing data in traditional databases, BI reporting solutions utilize in-memory computing technologies to eliminate data silos and improve performance in terms of data storage and analysis. BI Reports also provide more sophisticated, graphical, and granular depictions of data that include visualizations and the ability to drill down into underlying data. BI Reporting also makes meaningful AI possible, since AI technologies rely on real-time access to data. Because of this, having a fully integrated BI Reporting capability should be considered a mission-critical aspect of any solution, and stand-alone BI solutions should be avoided as they have the very same drawbacks as stand-alone reporting/data warehouse solutions.
The Importance of Client Portal
Having accurate data and better reporting is critical, but it is equally important to have an effective and user-friendly web-based client portal software that can provide a great experience for the end-user. Whether they be a client, consultant, third party, or even the firm’s own staff who are looking for more timely information and reports to do their jobs better, having an effective client portal to distribute this intellectual property effectively and securely provides for the complete digital experience, which is the end-result of technological improvement.