Vendor Relationships in the Time of Consolidation: Are Your Vendors in it for the Long Haul?

The impending sunset of Barclays POINT was prominent at the recent FTF Performance Measurement Americas (PMA) conference, underscoring the long-term risks of a short-term focus on software

Jeff Cullen, Solutions Principal


While most performance system RFPs focus on a given product’s user interface or the specific features that are built directly into the software, organizations should also consider the potential for technology debt, which stems from distributed systems and the unhealthy dependencies that often develop with their presence. I recently participated in a panel at the FTF PMA conference in New York entitled “How to Justify System Migration Pain”, and this was a theme that seemed to be top of mind among the panelists following the recent consolidation among fintech vendors that underscored this growing challenge.

The discussion also featured Jeffrey Malmin, General Director, Performance Reporting at John Hancock Investments; Shankar Venkatraman, Director, Global Head of Performance, Risk, Analytics and Compliance at Citi; Jeremy Welch, Head of US Hub Operations at BNP Paribas; and Jeffrey Bellavance, Manager Performance and Analytics at PanAgora Asset Management.

One takeaway from the event resonated with me as the sole vendor on the panel: The consistent recognition that investment firms and asset managers aren’t simply buying software anymore, they’re entering into a relationship with their vendor.

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Taking Control of Your Investment Operations

Ravi Patel, Solution Specialist


Operating under cost pressures, reduced margins and tough competition, the manufacturing industry has constantly adopted lean operations to eliminate waste of resources and time. Adopting automated process governance across stock control to bill of materials & final packaging, provides an early diagnostic, helps eliminate defects and improves overall operational efficiency for manufacturers. Ultimately this helps them to control costs, meet quality standards, and maintain consistency and reliability of their end product

Lean operations in the manufacturing industry is an example that many Investment Managers could benefit from when it comes to their middle and back office operations. This understanding resonated well with the assembled crowd at TSAM London, where I presented Eagle’s Control Centre. My conversations with various delegates at TSAM confirmed that the reality for investment operations and accounting teams today is very different. Due to silos of disparate legacy systems, they are forced into adopting fragmented manual workflows, which are causing considerable data quality challenges and reconciliation overhead.

Resource intensive manual intervention such as ledger to sub-ledger reconciliation, NAV impact checklists, NAV reconciliation and market data variances regularly cause delays to the valuation process. The reactive nature of such manual workflows often reveals upstream data quality issues once valuations are calculated. Today, these issues are identified late in the process by performing in-depth root cause analysis, causing loss of productivity and often missed SLAs.

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A Journey Through the Evolution of Buy-Side Investment Data Management

Marc Rubenfeld, CIPM, Head of Eagle Solutions EMEA/APAC


At the recent TSAM London event, I had the honour of chairing the data management conference stream. This involved moderating debates, introducing speakers and facilitating conversation throughout the day. In preparation for the event, I began thinking about the history of data management and what I have seen as the stages in its evolution within buy-side investment managers.

Each new innovation or concept in data management has followed a similar evolutionary path, starting with awareness or recognition around the concept itself. Then follows a ripple of early adopters that look to build their own solutions, before vendors step in to refine and improve the innovation with commercial solutions. Over time, these vendor solutions can offer even more cost savings in the form of a managed service.

Over time, with each new innovation, the period it takes to evolve has contracted as firms have become quicker to embrace new concepts and vendors more agile in reacting to client needs. To illustrate this, I put together the diagram below, based on the design of the London Underground map. The horizontal line roughly approximates time and each evolutionary stage is represented as a station.

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Eagle & BNY Mellon: Defining “Pragmatic” Innovation

Through leveraging existing technology assets across BNY Mellon Eagle’s relationship with its parent company facilitates collaborative, business-led innovation

Dan Cavanaugh, Head of BNY Mellon Program Services


Technology and digital innovations hold the promise of new and better ways of doing business, creating efficiencies that often leave users wondering how they managed any other way. Startups that either leverage or advance these technologies are being launched daily, and while these fledgling efforts often garner the bulk of industry headlines, most fail to live up to the hype. Depending upon how one defines failure, Harvard Business School’s Shikhar Ghosh has estimated that as many as 90% to 95% of all startups ultimately fail to reach their stated expectations. The challenge, as many discover, is that commercial success requires far more than just a good idea and an initial round of funding.

This is not to say, however, that the market is not hungry for new solutions. While early stage venture will remain a hit-or-miss game for many investors, the fact that FinTech companies have raised approximately $25 billion over the past 12 months speaks to the opportunity set. As financial institutions continue to cope with fee pressure, low economic growth, historic regulatory change and the coming digital revolution, the urgency to transform their operations to accommodate this new world is only becoming more pronounced. It’s more likely than not, however, that they’ll be turning to existing relationships to solve these issues.

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Assessing the New Landscape for Evaluated Pricing in Illiquid Bonds – US Muni and Corporates

Jimmy Suppelsa, COO of Eagle alliance vendor Best Credit Data (BCD), highlights why industry consolidation is opening the door for tech-driven offerings that offer quality and coverage in evaluated bond pricing.


By design, municipal bonds are a tax-efficient alternative for income investors seeking regular and predictable interest payments. This lends to the idiosyncratic nature of the muni market, as it’s the only asset class in which individual investors make up more than 50% of the investor universe. As allocations to municipal bonds often underpin individual retirement accounts, trading volume is minuscule compared to the size of the actual market. In a high-volume trading session, there may be 12,000 trades that affect less than 1% of the roughly 1.25 million active securities. This is why pricing can seem so lumpy to outside observers. At the same time, it is also why two or even three sources of pricing data are needed to arrive at a valuation that best serves a fund’s investors or clients.

In fact, most fund managers self-regulate to incorporate two independent sources of evaluated pricing data. Even in this new era of deregulation, the need for both a primary and secondary source will remain critical, as pricing is often quite volatile relative to other markets due to the lack of volume. Recent consolidation, however, has altered the evaluated pricing landscape and amid the search for alternatives, many are now exploring how new models can complement the offerings of existing players.

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Are You Ready to Move on From Your Legacy Portfolio Management System?

Eagle’s Darcie James-Maxwell looks back on her experience both using and then helping clients to replace investment systems, as she discusses how legacy-system replacement can be a catalyst for efficiency and growth in our latest Q&A.


Q. It’s been roughly a year since you were named the Head of Eagle’s Operations in Canada. What was your initial focus when you transitioned into this role and what have been some of the biggest challenges you’ve encountered?

That’s a good question. When I transitioned from overseeing the relationship management team in Canada to overall accountability of our Canadian business, my number one focus has remained our clients. I have spent the last year meeting with clients to ensure that we have a clear understanding of their business goals and objectives—after all, it’s paramount that Eagle continues to meet their business requirements. I also spent a fair amount of time looking at the wider landscape in Canada, where the market is on the verge of significant change. There are a number of legacy platforms that appear to be nearing end of life, which is causing several clients to think about their multi-year roadmaps.

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Bridging the Data Disconnect Between the Back and Front Offices

Patrick Orlando, as part of a panel at TSAM Boston, highlights why it is so critical for business users to engage in the earliest phases of a data management platform implementation.

Patrick Orlando, Principal Consultant, Eagle Investment Systems


This past November, as part of a data management panel at TSAM Boston, a member of the audience inquired about one of the biggest challenges facing most data professionals: The sometimes glaring disconnect between the back-office teams providing data and the front-office users that are often unsure how to turn this information into actionable intelligence that informs both business strategies and investment decisions. The consensus among those of us on the panel was that more often than not, issues such as these extend all the way back to implementation and the earliest stages of standing up a data management platform.

This was a topic that seemed to be of particular interest at the event, which was held in Boston on November 16. A TSAM survey of senior executives ahead of the conference revealed that over half are currently planning to replace legacy systems and technology during the next 12 months, while nearly a third (30.5%) identified plans to introduce a new data governance strategy. This budding level of interest was evident during our panel, “Transforming Your Firm Into an Information-Centric Organization,” as we spoke to a packed room of delegates.

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Addressing the ESG Data Challenge

In his new blog, Eagle’s Australian-based Director of Client Services, Manu Sathananthavel, discusses the growing prominence of ESG factors in the investment process and the accompanying data challenges this presents. He reveals how a data-centric approach can help firms effectively integrate and ensure the quality of ESG data and highlights how Eagle’s clients, such as First State Investments, are using Eagle for their ESG reporting.

Manu Sathananthavel, Director of Client Services – Australia


In recent years, we have witnessed a surge in interest in environmental, social and governance (ESG) considerations among asset managers. Despite attempts to define and standardise ESG factors, most notably by the United Nations which set up the Principles for Responsible Investment (PRI) in 2006, best practice still hasn’t fully emerged and reporting from region to region remains inconsistent. Furthermore, there is little consensus around the measurement of ESG factors, scoring and definitions many of which are more subjective than other performance measures, and there is little in the way of formal regulation to shape that consensus. As a result, the collection and reconciliation of high quality data are among the key challenges facing asset managers as they look to improve their ESG reporting.

Interest in ESG and impact investing is being driven by a number of factors. First, asset owners and investors are keen to have a positive impact on society and the environment. Issues like climate change have forced their way up the agenda in recent years while high-profile man-made environmental disasters such as the Deepwater Horizon oil spill in 2010 and the Vale/BHP Billiton iron mine collapse in Brazil in 2015 have also brought ESG into sharper focus for investors.

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Eagle Enterprise Data Management: More Than Just an Operational Data Store

 

In this video, Marc Rubenfeld, Head of Eagle Solutions – EMEA/APAC, discusses BNY Mellon’s EMEA Innovation Center and the role it plays in helping Eagle collaborate with clients to deliver groundbreaking solutions. In particular, the Innovation Center provides a showcase for Eagle’s Integration Workflow Studio as well as our interactive business intelligence tools.

Live from Engage: Engage 2016 Comes to a Close

Diane McLoughlin, Chief Client Officer, Eagle Investment Systems


As this year’s Engage conference has come to a close, I am reflecting on this being my first client conference since assuming my role as Chief Client Officer. Not only was it our biggest and—I think—best event yet, but it really embodied the spirit of collaboration that was the catalyst behind forming the Office of the Client in the first place. Moreover, as Eagle’s parent company BNY Mellon took on an active role at this year’s event, the spirit of collaboration was evident as our peers, clients and ecosystem relationships sought to tackle the issues shaping the future of financial services.

The purpose of my role is to channel many of our outward-facing resources, to ensure we’re engaging with our clients to better understand the challenges they face, and to ultimately ensure that our offering provides them with the best possible solution set for a rapidly evolving investment landscape. Engage is a key component of this feedback loop, I’m thrilled that over 575 attendees were able to join us for this year’s event.

The theme of Engage 2016 was “Invested in Your Future”, which not only highlights the considerable financial investments we’re making to support and enhance our offering, but also speaks to the intellectual investment we make to ensure that our new solutions meet the specific and distinct needs of our clients. Through 2 general sessions, 45 breakout sessions, and 4 Engage talk presentations, as well as an innovation center that provided first-hand experiences with new solutions and capabilities, the programming focused on innovation and the ways we’re working to enhance our platform to meet the demands of the future. We heard from clients, industry experts and thought-leaders from both Eagle and BNY Mellon to ensure we remain aligned in our mission to help the world grow assets efficiently.

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