Skip to main content Skip to Footer

LATEST THINKING


Designing a modern IT ecosystem for asset management firms

A new Accenture report finds that a modern IT ecosystem will play a key role in an asset management firm’s ability to achieve growth.

Overview

Market volatility, low interest rates and greater regulatory scrutiny have placed significant pressure on asset management firms to increase profitability while finding new avenues for growth. Addressing such changes without a solid IT foundation will be difficult, if not impossible.

The benefits of a sophisticated and integrated back office function are undeniable, yet many asset management firms struggle to find the right package of IT solutions to support the organization’s strategic objectives.

In this report, Accenture explains how a technology “ecosystem” can support rapid change with a high degree of flexibility and adaptability, and offers asset managers steps to get started.

Background

Given the benefits of a sophisticated and integrated back office function, it might be expected that all major asset management firms would have state-of-the-art IT infrastructures. This is not the case, however.

For most firms, the IT focus has been on customization, choosing a platform that suits specific needs. While this approach was well suited to an environment characterized by steady growth, high profitability and minimal disruptions, its limitations are significant. What’s more, as industry forces push asset management firms toward choosing one of five basic operating models, firms will need to create the right IT infrastructure to support their chosen strategy.

Analysis

Top asset management firms are exploring the concept of a technology ecosystem that supports rapid change with a high degree of flexibility and adaptability. Firms can now take a “pay as you go” approach, avoiding large upfront capital expenditures, and software and solutions can be purchased on a modular or “compartmentalized” basis, so that the acquisition of new functionality in one area need not cause disruption in another.

The ecosystem provides support for core processes, but also provides the agility needed for new product introductions—and even the entry into new asset classes such as real estate, commodities or alternative investments—quickly and efficiently.

Recommendations

Accenture recommends asset managers address a number of key considerations before undertaking a major IT transformation initiative:

  • Align the technology platform with the chosen operating model.

  • Determine the governance of the transformation project and of the IT platform going forward.

  • Map out the architecture and ecosystem with key software components and suppliers identified.

  • Reach agreement on budget, a roadmap and a timetable for implementation.

  • Discuss the current and future needs of internal stakeholders in areas such as research and portfolio management, investment administration, and trading and compliance.

Industry & topics highlighted

Capital Markets