Fund Operator: What have been some of the more notable changes in technology that you’ve seen in the fund industry in recent years?

Gina Ehrlich: I have seen changes in the areas of marketing technology and automation. For instance, we recently invested in enterprise-level CRM software that allows us to create sophisticated marketing campaigns and track who is interested in our funds.

We are also leveraging automation to keep our web site updated and produce our fund factsheets.

Our capabilities have evolved since we started the funds. We capture data from source accounting systems and feed it daily to our mutual fund website.

"we recently invested in enterprise-level CRM software that allows us to create sophisticated marketing campaigns and track who is interested in our funds"

We are also starting to use content management software to pull data from different sources, generate factsheets and keep the collateral consistent.

On the compliance side of the house, message archiving continues to be an area where improvements in technology have been required.

In addition to storing e-mail and messages from a variety of other applications, we archive content changes to our web site to ensure that digital marketing is available for audit purposes.

FO: What are some of the key considerations when debating “buy versus build versus outsource”?

Gina: I think it is important to ask whether your requirements can be met by an off-the-shelf product.

In our case, we are an investment firm and not a software development firm. When assessing a new system, we always ask ourselves whether we need to develop applications in-house, or if we can buy and configure it instead.

Some key considerations are:

• Do we have the right staff to build and maintain a software and infrastructure platform that is critical to our business?
• Does a vendor offer a better application infrastructure than what we could provide in-house?
• Can an outsourced provider provide certifications and security standards as well as audit attestations?
• Do we have the bandwidth to properly evaluate and monitor vendors in order to minimize risk to the business?
• And of course, which decision makes the most sense from a cost and accounting standpoint?

FO: Are technology departments feeling more pressure to come up with cost savings in the operational structure of a fund and how successful are they at doing so?

Gina: There is always pressure to save money within a firm and technology departments are no exception.

Part of my job is to consider how we can deliver the best technology solutions at the most reasonable cost. I do this through careful product selection, vendor contract negotiation and outsourcing of technology work where possible.

FO: Do you feel that the service and product industry are providing ample choices for IT departments to select infrastructure solutions that fit function and cost requirements?

Gina: There are more choices available today then there were 10 years ago. I see more competition for similar products across vendors.

I think many providers realized that there was significant opportunity to build modern technology solutions within the financial services vertical.

"It is critical to define and prioritize business requirements in order to determine the best solution"

I am pleased to be able to have many choices for vended software as well as work with technology professionals that can fill any gaps with proprietary options.

It is critical to define and prioritize business requirements in order to determine the best solution. Without taking this step, you may end up buying or developing software with features that do not necessarily support the business or fit in with the culture.

FO: Do you see the IT function as having a more prominent role in critical decision-making nowadays?

Gina: Yes, I think technology touches every part of the business and has the capability to provide a competitive advantage when the right investments are made.

For instance, my team recently executed a significant digital transformation and replaced our accounting, trade, billing and reporting systems. One result of this initiative has been that SBH has scaled the business without a material increase in operational staff.

"Technology has the capability to provide a competitive advantage when the right investments are made"

The IT function is often pulled into critical projects that require a large investment of time, money and trust from leadership. We must be able to keep pace with changes in the business, understand the technology, and anticipate what the growth trajectory is going to look like.

FO: How do you see the IT function in the fund management industry evolving in the next few years?

Gina: I believe we will need to put forth our very best efforts in IT cybersecurity programs that include strong controls, incident response plans and ongoing employee training.

Cybersecurity is a very important topic, and we must make sure that we are continually investing in the programs that protect client information. Mutual fund boards are very interested in cybersecurity and how firms are protecting data.

"An excellent cybersecurity program increases the probability that our data is sound and continues to flow accurately through the trade cycle"

Security programs cross over into business continuity programs. They are critical to making sure that our companies stay up and running.

From my perspective, an excellent cybersecurity program increases the probability that our data is sound and continues to flow accurately through the trade cycle. At the end of the day, this increases our value proposition to clients.

This article is taken from the research report Fund Technology, Data and Operations, America 2019. To download the full report click here.

 

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