“As a growing global asset manager, we at Northern Trust Asset Management have had choices to make in order to continue to grow and evolve,” explained Martha Fee, chief operating officer at Northern Trust Asset Management.

She was speaking that the Fund Management Operations Summit in London, where she was delivering a talk about how operational efficiencies and good use of technology can keep asset managers relevant in the modern world.

She continued: “Northern Trust is known for being conservative and cautious so it wasn’t about throwing the baby out with the bathwater but what we did want to do within our asset management operations is achieve three goals.

“First, the ability to get to a single book of record for all of our products globally. Second, we wanted to be able to standardise our operating model globally and [thirdly] we wanted to be able to enrich our data, with all roads leading back to data, the holy grail.”

"Northern Trust is known for being conservative and cautious so it wasn’t about throwing the baby out with the bathwater"

She says that the company didn’t just want to keep pace with technological innovation, but also to find new ways of doing things more efficiently, without getting lost in the technology.

Fee explained that there is no ‘one size fits all’ approach, and that every firm will need to identify the technologies that are best suited to its business needs.  But, being able to standardise and automate processing whilst also building in agility and quality is a strategic way to achieve a faster return on your investment.

To demonstrate, she gave the example of the approach Northern Trust took to simplifying its global operations for investment teams.

She said: “We have investment operations teams across EMEA, North America and Asia Pacific. They have all grown up and developed over time, so we started firstly by ensuring that our teams aligned globally into three distinct disciplines, client administration, portfolio administration and investment administration.

"Within our client administration practice we wanted to ensure that where possible our teams were following a consistent, standard set up process around the globe."

“Within each discipline we had to ensure that they followed a standard, consistent practice regardless of their location.

“Let’s be honest, things creep in over time. Someone new may join, there is an extra step or extra process that is added. Within our client administration practice, we looked at our onboarding set up and we wanted to ensure that where possible our teams were following a consistent, standard set up process around the globe.

“Similarly, when we looked at our portfolio administration discipline, we looked at our reconciliations process and certainly last but by no means least, when it came to our investment administration, we looked for consistency from the team in relation to our portfolio management and trading support.”

She said that being able to simplify and have consistent lower risk workflows gave the organisation greater oversight, better management reporting and reduced its application footprint globally. It also enabled Northern Trust to get to an operationally efficient model that not only reduced costs but also brought the company closer to that holy grail of better data.

Once this had been done, Northern Trust started to look at what could be automated. Initially this was tricky, Fee explains, as people were asking why a system that was working needed to be changed.

She said: “Once we got the SMEs around the table with a couple of our business analysts and started to map out the process, we were able to identify pain points and opportunities to either automate or re tool things in a different way. Our aim was to instil the mindset of trying to get it right the first time and reduce the cost of that rework.

"Once we got the SMEs around the table with a couple of our business analysts and started to map out the process, we were able to identify pain points and opportunities"

“We also looked at rolling out the same approach within our client reporting and performance teams and once again we were met with the, if it ain’t broke don’t fix it mantra, so we started off small and took one or two processes that caused the most pressure on teams in terms of deliverables.

“Again, we found that by taking the time to map out the process, to sit with the SME and the managers of the team and to appreciate the pain points, we found ways to improve the process, from new tools to automation.”

The results were startling. Business processes that used to take 10 days were only taking eight and employees were nimbler and more dynamic in terms of servicing and relationship management.

Fee said: “We next started to fine tune this process and see how we could build even further efficiencies into the process by building up confidence in the team and that can-do mantra to think differently and push for efficiencies.

"The golden palace when it comes to data is a single source of truth, which remains our goal."

“What we found is that increased automation did free up time for the more sophisticated, value add work as opposed to people being bogged down in the routine and mundane tasks… Having ops professionals focused on the exception-based processing, looking at the data, understanding what is really driving it and behind it enables the team to get into that risk mitigation and prevention mode as opposed to writing up incident reports after the error has already happened.

“Tnce we got the SMEs around the table with a couple of our business analysts and started to map out the process, we were able to identify pain points and opportunities The golden palace when it comes to data is a single source of truth, which remains our goal.

“The end result is not just about an error free KPI but also about the potential for a better employee and client experience. All of these things build towards the client alpha, if you get these things right you will get that right too.”

 

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