Trends

Achieving Operational Excellence:
The Growing Role of Big Data

 As seen in the 2016 Mutual Fund Service Guide

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Using data science in the back office to improve processes and business performance.

Mike Maltby, Product Manager


Operational excellence has always been and continues to be the strategic goal and nirvana for asset managers and service providers. Operational procedures that have developed from constant human interaction and paper-based processing continue to haunt organizations that strive for operational efficiency. This has opened the door for technology providers to promote their evolving technologies and control environments powered by straight-through processing.

Yet, it is no secret throughout the mutual fund industry that true operational excellence continues to remain elusive. Mutual fund companies and third-party administrators continue their quest for operational excellence. The quest is fueled by the enticement of significant upside potential including:

For mutual fund companies, operational excellence enables the quickest delivery of the most accurate, highest-quality data to the front office.

For third-party administrators, operational excellence means reduced costs, better service value to clients and an ongoing competitive advantage.

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Self-Service Reporting: Changing Consumption Patterns in Business Intelligence

Harry Rose, Managing Director


According to a new report released by Gartner’, revenue in the business intelligence (BI) and analytics market is expected to exceed $16.5 billion this year, representing growth of more than 5% compared to last year, as self-service analytics continues its march to replace IT-led reporting processes. The report cites that growing “accessibility, agility and deeper analytical insight” continue to drive adoption, which is only reinforced as organizations recognize the value and efficiencies of empowering business users to take a more hands-on approach to data and analysis. At the same time, expectations are changing among business users when it comes to their ability to access and consume information.

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Data Enrichment: The Key to Understanding True Economic Exposure

The use cases for data enrichment continue to multiply as asset managers and their clients look to get a truer view and greater understanding of their positions. Patti Coan explores the data enrichment tools at their disposal and how they are best leveraged.

Patti Coan, Product Manager – Portfolio Data


It is probably fair to say that asset managers are looking to do more with their accounting data than ever before. The interest in the Investment Book of Record (IBOR) in recent years is testament to that as firms recognize the advantages that come with more immediate and comprehensive access to investment data. As such, demands around data enrichment are growing as global institutions seek to leverage their data in new ways, all in the name of gaining a clearer picture of their positions and exposures.

Many of the conversations we have with our clients and prospects revolve around how they can deliver greater insight to the front office and conduct deeper, more forward-looking portfolio and performance analysis without compromising core accounting data. This is particularly the case for portfolios with derivative securities such as futures, options and swaps. Demand for enriched data is being driven by both internal and client needs as well as the mounting squeeze from regulators, who are scrutinizing data more closely than ever before.

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Innovation: A Catalyst
for Collaboration

Mal Cullen, Chief Executive Officer


bulbThis past November, with little fanfare, MIT’s Sloan School of Management introduced a new course focusing on financial technology applications. With the aim of exploring how technology can improve areas such as consumer finance, payments and trading, this is the very first graduate-level course to focus on FinTech in the US. In a sense, it also marks a new era for financial services in general, one perhaps long overdue, in which the market embraces disruptive technologies and their ability to advance financial services. Institutions either embrace technology or risk being left behind.

Consider just how much capital is pouring into the sector, all with an eye on automating, digitizing and optimizing financial services. In the third quarter of 2015, $4.85 billion in investment funding flowed to venture-capital-backed FinTech companies, according to research firm CB Insights. This eclipses the total funding dedicated to the segment in all of 2010 and 2011 combined. In the past two years, FinTech startups have attracted more than $16 billion.

Make no mistake, the future is already here—it is just not as evenly distributed as many in the sector might like. For instance, advances such as blockchain technology and the ongoing evolution of big data promise to irreversibly change the industry. The question then becomes not what the future holds but how will current business models adapt to harness and profit from these developments. Yet, while most other sectors fear disruption, the innovation that ensues in financial services will more likely serve as a catalyst for collaboration between incumbents and startups.

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PBOR: Aligning the Middle Office to Meet Escalating Front-Office Demands

Rich Mailhos, Product Manager, Performance Measurement


Rich Mailhos recaps a recent webcast featuring Eagle clients TIAA-CREF and Fort Washington Investment Advisors on the far-reaching value of PBOR

Those with graying hair may still remember the old days of performance reporting and the nascent technology that supported these efforts, marked by dedicated offices housing DEC VAX machines and rows of computers running Fortran code. A holdover of this era is the continued reliance on monthly custodial data and spreadsheets, even as data volumes grow and the various forms of data multiply. Those in the middle office tasked with performance measurement are all too familiar with the problems posed in trying to manage siloed data through Excel and in a way that meets the escalating demands of the front office. As these challenges reach critical mass, asset managers are increasingly turning to a Performance Book of Record (PBOR), a term Eagle introduced to the market in early 2015.

Such was the subject of the webcast I recently participated in that was hosted by WatersTechnology. Also participating in the discussion were Eagle clients, TIAA-CREF’s Senior Director of Performance and Reporting, Nancy Carola, and Fort Washington Investment Advisors’ Manager of Performance and Reconciliation, Tom Anderson. WatersTechnology Editor in Chief, Victor Anderson, served as moderator. Read More…

Accounting for the Front Office: It’s Not Just the Ingredients that Make the Dish

Todd Snodgrass, Head of Global Support


toddMost city dwellers in the United States, if they’re up early enough, will notice the ubiquity of the food-service trucks. These refrigerated 18-wheelers, typically operated by one company,  will work their way throughout the neighborhood early each morning delivering food and ingredients to nearly every restaurant along the way— from the five- and four-star establishments all the way down to the fast-food and quick-service chains. Though they are all working with similar ingredients from the same source, each restaurant will prepare distinctly different dishes.

In a lot of ways, this is not all that different from how financial services firms and investment managers use accounting data. Generally, it all comes from the same source, but what the firm does with the data once it is in their hands determines not only how they can use it but also whether this data offers a competitive advantage. Just as the kitchen in a restaurant determines whether basic ingredients will become fast food or fine dining, an investment accounting solution and the minds that operate it determine what will come of accounting data.

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Empowering the Performance Team

Jeff Cullen, Principal Consultant and Vice President


Historically, performance measurement has been a discipline largely relegated to a supporting role within organizations both large and small, and performance teams have been responsible for what was primarily reactive and backward-looking analysis. Today, investment firms are, more than ever, looking to explore the possibilities of predictive and prescriptive analytics in helping to manage risk and improve performance. This requires an understanding of the consistency and quality of data across the firm, how to apply that data, and a skill in high-level analysis that spans across departments. It is no surprise that smart management teams have noticed that their performance teams are the nexus of exactly the type of data aggregation and skills best suited to unlocking this potential. At a recent discussion I took part in at TSAM Boston, one panelist noted: “Anything with a number attached to it is going to find its way to the performance team.”

That panel discussion, “Creating a Holistic Performance Measurement System”, focused on the nuances of these burgeoning capabilities. Joining me on the panel were performance executives from Aberdeen Asset Management and Acadian, while Bob Leaper, President of PanoVista.co, served as moderator. Sitting with these delegates was a great opportunity to gain insight from talented professionals in the discipline to which I have dedicated my career at Eagle.

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PBOR – One Year On

A year after the concept of the Performance Book of Record was introduced, Rich Mailhos takes a look at its role in the global asset management industry now and in the future

Rich Mailhos, Product Manager, Eagle Performance


The Emergence of PBOR
It is nearly a year since the concept of a Performance Book of Record (PBOR) emerged from a research study we conducted in conjunction with WatersTechnology. The study highlighted the shortcomings among investment management companies when it comes to generating accurate and transparent performance and risk analysis across the enterprise and the need for a specialized solution to address these challenges.

Only 21% of the companies surveyed were very satisfied with their ability to access timely, accurate and relevant performance data with the overwhelming majority (72%) having to use multiple systems to aggregate their investment and performance data for management and client reporting.

The study started an important industry dialogue about the growing need for enterprise-level performance and risk reporting which has continued and intensified over the course of the year. It also appears to have, by reference, helped crystalize the industry’s thinking about the Investment Book of Record (IBOR), when it is appropriate and what its limitations are. Rather than a panacea, IBOR is one part of a solution to a more fundamental set of challenges facing the industry.

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Absorbing Complexity:
Build the Moat

Investment managers and financial services firms are confronting a rapidly changing competitive landscape and their infrastructure can be a critical gating item in their pursuit of new opportunities

Mal Cullen, Chief Executive Officer


Clayton Christensen, in his seminal book The Innovator’s Dilemma, catalogued the various patterns of innovation that can occur within a sector, establishing a spectrum that begins with the repackaging of known technologies and ends with truly disruptive innovation that can turn an industry on its head, such as Uber or Napster. While the financial services sector has not faced the latter scenario in the past quarter century, the rapid growth of the alternatives space, coupled with new advances that have commoditized what were once considered exclusive and esoteric strategies, means that investment managers today are only now being faced with the question that Christensen so poignantly addressed in his book: How do you introduce new products and capabilities without being bound to servicing the customary needs of existing clients. The difference, at least for most financial institutions, is that, it is their existing clients who are calling for disruption.

Traditional asset managers realize that product innovation has become more critical than perhaps ever before. As McKinsey identified in a December, 2014 research paper (“The $64 trillion question: convergence in asset management”), certain secular factors are driving asset managers to build out their product set to meet the heightened and more expansive demands of their clients. The McKinsey research cited that a bifurcation is occurring between large and small institutional investors, with each group approaching their strategies differently to fulfill diverging portfolio needs. Whereas smaller institutions want access to a broad range of brand-name managers with product depth and perceived stability, larger institutions are migrating to more cutting-edge portfolio construction to build new capabilities and embrace “risk-factor-based methodologies.”

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