@Pixabay.

The asset management industry is grappling with increasing complexity, driven by evolving regulatory demands, higher client expectations, and intricate workloads.

To remain competitive, companies are turning to co-sourcing and outsourcing strategies to optimise their operations and focus on core capabilities.

In a recent webinar produced with SS&C Advent, titled “Navigating Complex Workloads: Co-Sourcing and Outsourcing in Asset Management”, panellists from leading firms shared insights into how their organisations balance internal and external resources to meet strategic objectives and ensure operational efficiency.

Making the most of third-party support

When dealing with co-sourcing and outsourcing, flexibility is king, according to Lindsey Bulger, Business Manager – Wealth Distribution, at Macquarie Asset Management.

“Downstream execution requires constant dialogue to meet the needs of the

business, as the importance of various priorities is changing all the time."

She said that the asset management firm, which has $633.7 billion in assets under management, needs to work in a way that allows it to deal with rapidly shifting priorities.

“Downstream execution requires constant dialogue to meet the shifting needs of the business, as the importance of various executional priorities is changing all the time,” she said. Adding that while regulatory compliance and risk management often take precedence, enhancing the client experience is a crucial piece of the puzzle.

David Muckley, Head of Legal & Compliance at Eastspring Investments, said that for his company, co-sourcing played a vital role in alleviating capacity constraints.

However, he cautioned that this approach needed rigorous due diligence to select long-term partners who not only provide expertise but also align with Eastspring’s risk management framework.

Traci McCormack, Global Head of Fund and Client Services at Allspring Global Investments, emphasises the need for constant evaluation and optimisation of operating models.

This means scrutinising both internal capabilities and external providers to ensure efficiency, and their capabilities are responsive to market demand.

“We had an opportunity to look back and inspect our operating model and how we are organised to encourage good collaboration flow between business functions,” she said. “We look, not only at our technologies but also our talent, and to make sure that we have the right skill sets in place and are skilled at interpreting data with a focus on critical thinking.”

She added that this process of “pressure testing” service providers ensures they not only meet baseline requirements but also push the boundaries of service quality. This in turn helps the firm to maintain high standards and adapt to evolving client and regulatory needs.

Building the right relationships

The panellists agreed that asset managers need to take a forward- thinking approach to vendor management in order to get the most out of the relationship.

“You need to ensure that this three-year term is aligned with

your go-forward operating model."

For instance, Bulger highlighted the need for a holistic strategy when engaging with third-party data providers, advocating for scalable and efficient solutions like API integrations over legacy systems such as flat file transfers.

This is particularly important when entering long-term contracts with vendors. Bulger said: “You need to ensure that this three-year term is aligned with your go-forward operating model,” arguing that alignment reduces operational friction and maximises the value derived from these partnerships.

Javier Flores, Director of Solutions Management at SS&C Advent, said that it was important to shift from a ‘vendor’ to a ‘partnership’ model to facilitate this long-term strategic approach, making sure that there is clear alignment to help clients grow their businesses.

“We have to be able to change the oil in the car whilst the car is driving so it isn’t easy, but this is what our clients want,” he said. “They need to de-risk, and it isn’t always software and solutions as there is also outsourcing. There are two sides of the same coin, providing the software side of the solution but also the servicing.”

Interested in hearing more? You can download the full report here.

 

Please Sign In or Register to leave a Comment.