About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Use of Third Party Providers by Buy Side is on the Increase, Says BNY Mellon Research

Subscribe to our newsletter

As proved by the plans revealed this week by IOSCO, the regulatory community is cracking down on the hedge fund sector and one of the side effects of these increased transparency requirements is that hedge funds are turning to third party providers to help them tackle the new data challenges. Recent research by custodian Bank of New York Mellon indicates that this is not just a trend within the hedge fund community: the buy side is more prone to use external providers than ever before.

The BNY Mellon paper, which is on the convergence between hedge funds and traditional fund management firms, involved feedback from 30 traditional managers, 23 hedge funds and 18 large institutional investors. According to the custodian, a quarter of respondents indicated that they felt a need for better integration of their front, middle and back office functions and a third currently outsource components of their back office. So, investments have already been made in third party solutions and more are on their way.

The convergence between these two traditionally distinct areas of the buy side is as a result of new transparency requirements that have meant changes to hedge funds’ structures. Most of these are related to data and risk management: these firms are being required to provide a greater level of granular data to both regulators and their clients on areas that they have not previously been required to report externally.

“More and more investment firms are turning to outsourcing providers as a cost-effective strategy that enables them to focus on their core business of managing assets,” says Joseph Keenan, managing director at BNY Mellon Asset Servicing.

This trend is therefore likely to further fuel the boom in buy side focused offerings from the vendor community. After all, buy side firms will need to up their game as the stakes are gradually being raised by both regulators and their customers.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: In data we trust – How to ensure high quality data to power AI

Artificial intelligence is increasingly powering financial institutions’ processes and workflows, encompassing all parts of the enterprise from front-office to the back-office. As organisations seek to gain a competitive edge, they are trialling the technology in variety of ways to streamline and empower multiple use cases. Some are further than others along the path to achieving...

BLOG

Gaining a Holistic View of the Modern Investment Portfolio: Webinar Preview

The economic landscape has been transformed in recent years by a combination of technological upheavals, rising cost pressures on financial institutions and a rewriting of geopolitical and trading norms. All of these have inevitably led financial institutions to reconfigure their operations and the data processes on which they depend. The next A-Team Group Data Management...

EVENT

TradingTech Summit London

Now in its 14th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

AI in Capital Markets: Practical Insight for a Transforming Industry – Free Handbook

AI is no longer on the horizon – it’s embedded in the infrastructure of modern capital markets. But separating real impact from inflated promises requires a grounded, practical understanding. The AI in Capital Markets Handbook 2025 provides exactly that. Designed for data-driven professionals across the trade life-cycle, compliance, infrastructure, and strategy, this handbook goes beyond...