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23 February 2021

Guiding Clients in Transformative Times

While the COVID-19 pandemic brought uncertainty to the financial markets and upended business operations for asset and wealth managers, displacement from offices has actually helped accelerate the industry’s digital transformation. Investment firms and their technology partners have found ways to operate more efficiently, and collaborate remotely, adopting new approaches that will benefit the industry and clients, post pandemic.

That was the consensus of a panel of investment technology executives, “Guiding Clients in Transformative Times,” part of the Cutter Research and Cutter Wealth North American Member Meeting, held virtually in November 2020. SS&C Advent’s Daniel Eriksson, Vice President, Solutions, took part in the discussion with a group of industry peers.

Among the many topics covered, Daniel identified three key areas in which he sees the pandemic having a transformative impact:

  • The pandemic has accelerated the speed of change in the industry, driving demand for digital tools to a whole new level
  • The shift from office environments to remote work has been a boon for outsourcing, as firms seek both cost predictability and reduced operational complexity
  • The dispersal of workforces has vastly expanded the available talent pool in technology, as firms are no longer constrained to specific geographies in their recruiting


He also noted the demand for tools to support front-office staff has increased dramatically in the past year. While asset managers have historically invested heavily to boost back-office efficiency, some technologies are still making early inroads to the front office. For SS&C Advent, 2020 was a record year for front-end tools like Advent Genesis, Daniel said.

Two key drivers have emerged regarding outsourcing. Faced with economic uncertainty, firms are examining cost structures and increasingly looking for efficiency and stability. Outsourcing reduces operational overhead and provides predictable cost structures. At the same time, asset managers are trying to diversify their offerings, as institutional and high net worth clients demand broader asset class exposure. While diversification can be a strong competitive advantage, it can also bring added operational complexity as firms need to account accurately for disparate assets, and present clients with a consolidated view. The pandemic has prompted many firms to determine whether they want to take on that complexity in-house – and the additional knowledge capacity required to manage it – or leave it to an expert.

The growing interest in outsourcing and the increased demand for front-office technologies are intertwined, Daniel noted. Firms see the cost savings and back-office efficiency gains from outsourcing as a way to free up funding for front-office innovations. Today’s outsourcing landscape also gives firms a variety of options across the spectrum, from limited outsourcing of low-value activity to full business process outsourcing.

The pandemic has put investment managers and their technology partners to a stress test. The Cutter panel agreed that the industry has collectively risen to the challenge, embracing transformation and implementing changes to emerge stronger, long-term.

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