Technologies in Asset Management Every New Manager Needs

    asset management technology
    1000 667 INDATA

    Technology plays a key role in asset management. Its implementation delivers a more automated and simplified investment process, as well as greater efficiency. Emerging technologies in asset management also offer firms a way to be more data-driven and create a competitive advantage as a result.

    When investing in the ideal tech stack for asset management technology, investment managers have many options with varying degrees of functionality and flexibility. So, what do firms need to achieve these benefits?

    In this post, we’ll explore what technologies and functionality are must-haves and what the future of asset management software platforms will bring.

    The Value of Technologies in Asset Management

    Like any industry, investment firms are on a quest for digital transformation and have a desire to adopt technology to deliver on goals. It’s also been an area where organizations have been spending more. 

    Technology has represented 15% of the industry’s cost growth. Modernization and reliance on software are required to support a more complex set of capabilities. So, what do firms get for this investment?

    The value and benefits of successful technology and software implementation include:

    • Optimized systems that accelerate workflows related to portfolio management and investment decision-making
    • Streamlined processes for the entire trading life cycles
    • Better, faster insights for more effective data analytics
    • Strengthened security over data for more effective compliance
    • Scalability that supports growth in terms of portfolio volume and AUM
    • Improved operational efficiency

    These desired outcomes and expectations also align with industry trends.

    Asset Management Technology Trends

    As firms look for asset management technology innovations, several trends are impacting how they design their technology infrastructure.

    • Spending is up, but firms want to save money through consolidation: According to a report on asset management, technology costs have risen significantly. Some of this is unavoidable, as things can’t stay the same price forever. However, firms are reconsidering their framework and seeking consolidated platforms that integrate and streamline investment management.
    • Data analytics and insights are a high priority: There’s so much data that asset management companies create and collect. Making it actionable is a crucial pillar for having effective business intelligence to help with decision-making. Today’s tech stack must provide integrated data management, and analytics, and also leverage AI.
    • Automation begets efficiency and productivity: The third trend is the ability to automate tasks and activities that are currently manual. Businesses want to deploy automation throughout workflows to reduce the strain on staff, which boosts efficiency and productivity. Further, it eliminates human error that can occur in manual operations.
    • Technology complexity drives the need for expert help: Another trend of note is that the responsibilities of in-house IT are compounding. Managing big data and robust technology requires a lot of time and expertise. However, it’s not a core competency, and many firms are relying on partners for this that also provide back-office managed services.

    What Managers Need in Technologies for Asset Management

    With the value, benefits, and trends defined, it’s time to focus on the specific software tools that will power firms now and in the future.

    Trade Order Management Systems and Execution Management Software

    The primary system managers need is an integrated trade order management platform. It combines a trade order management system (OMS) and an execution management system (EMS), which can be sourced from separate providers or from a single vendor With this technology, investment management firms have full trade order management functionality and a host of other features, including:

    • Order and execution management
    • Automated trade creation capabilities 
    • Pre-trade compliance
    • Advanced trading blotter capabilities, including analytics
    • Automation of complex, multifaceted workflows ideally for multiple asset classes
    • Access to alternative trading venues (ATS) and liquidity platforms

    In one system, users have a wealth of functionality that saves time, improves performance, and optimizes the trading process creating alpha.

    Portfolio Management Software

    Managers should also place portfolio management software on their must-haves. Such a solution should ideally combine portfolio management with CRM functionality, especially for separately managed accounts. Users can then have a holistic understanding of portfolio information, including analytics, contact details, and related data.   Portfolio Management systems provide a host of features, including:

    • Portfolio modeling and rebalancing on an automated basis across asset classes
    • IBOR (Investment Book of Record) for viewing portfolio holdings in real-time as well as historically
    • Real-time, pre-trade, and post-trade compliance capabilities
    • Performance analytics and portfolio analysis including attribution
    • Robust reporting capabilities

    In evaluating options, focus on how the system uses and makes data available. Firms will derive value from technology that offers real-time data, customizable dashboards, analytics, and automation. Look for a system that integrates front-middle-back office operations and is flexible and customizable.

    This software should also provide a client portal so they can gain access to their accounts. With this, clients have full transparency and can conveniently view information.

    BI Reporting

    The third essential piece of technology and functionality in the asset management stack is business intelligence (BI) reporting. Most BI reporting in firms is currently manually driven and difficult to scale. The sheer amount of data coming from many sources complicates the situation. However, organizations can use AI-enabled BI reporting to aggregate information from many places, internal and external, to create BI reports. 

    Look for a platform that does this with ease and doesn’t require special programming or IT assistance. It’s essentially an automation engine that turns data into insights.

    For each of these platforms, asset managers should consider cloud hosting and ideally cloud-native software solutions. These systems can work together more seamlessly in the cloud. Cloud hosting is secure, reliable, scalable, and cost-effective.   Cloud-based software is an essential pillar of the modern tech stack of any asset manager.

    What’s the Future of Asset Management Technology?

    IComplete investment management software capabilities on a front-to-back office basis are currently impressive, but there’s more on the horizon. With INDATA, each solution discussed is already leveraging AI and machine learning in innovative ways. INDATA will continue to hone these features, focusing on data quality and usability. Machine learning algorithms will also continue to improve as more data feeds into modeling and analytics.

    Automation will become more advanced too. Currently, automated tasks are primarily those that are rules-based and repeatable. Fusing AI into this enables further opportunities for smarter automation, which can augment human intelligence.

    The future investment firms want from technology is how it can differentiate them. A study found that 95% of executives are focusing on this outcome. They are also prioritizing enriched personalization for clients, which technology enables with data analytics. A dedication to client-centricity is more attainable when there are systems and data to sustain it.

    Further cloud adoption is on the horizon, and many organizations prefer a private one. Cloud model over a public cloud model. Technology providers will make cloud solutions more accessible to simplify upkeep. There are substantial cost savings with cloud versus on-premise solutions, as firms won’t be responsible for the underlying IT infrastructure.

    Start Your Technology Modernization and Optimization Journey With INDATA

    The future of asset management is here, and technology is its foundation. For firms to get and stay ahead, managers need an integrated, innovative asset management platform. INDATA provides managers and all users with empowering software that creates efficiencies, actionable insights, and improved data management.

    Learn more about the possibilities by requesting a demo with the INDATA team.