The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Can Asset Managers Finally Find a Cure for their Reporting Headaches?

Clement Miglietti, Chief Product Officer, NeoXam.

It is hard to think of another issue that has been deliberated over more in recent times than the need for accurate reporting. The issue is, as with so many issues relating to market infrastructure, the bigger the problem the harder it is to actually come up with a definitive solution. With investors scrutinizing performance daily and imminent new regulations demanding more reporting, there has never been a more pressing need for asset managers to overcome their client and regulatory reporting challenges.

Impending regulatory changes worldwide, including changes to PRIIPS, MIFIR, SFDR and AIFMD, ask for increased transparency around costs, risk and performance, liquidity, and now sustainability objectives. All this reinforces the necessity of having in-depth reporting around investments. But regulation is by no means the only driver of an increased focus on reporting. There is clearly a realization that service matters when it comes to creating value for investors. Both passive and active managers are trying to broaden the range of services they offer, and they are trying to offer a service that goes beyond generating returns.

Numerous asset managers have already invested heavily in services in a bid to become more than just return generators. Some are extending the reach of their reporting business so broadly that they are becoming tech companies with a view to retaining and winning more business – BlackRock’s Aladdin platform is a prime example of this. In addition to expanding services and managing new regulatory pressures, asset managers are seeking operational efficiencies.

They are also trying to rationalize reporting costs by rethinking how they handle the process. This involves moving from an internal reporting factory to a software-based solution. Further, additional difficulties exist on the horizon as volatile market conditions increase the reporting burden. One only has to look at the fallout from the recent Archegos Capital saga. Volatility around the Viacom stock, underpinned by total return swaps, is likely to increase scrutiny of filings by both the SEC and CFTC. Investment managers should not look at reporting through the lens of damage control. Instead, streamlining internal regulatory processes will increase efficiency and facilitate potential future expansion.

All difficult scenarios have potential benefits. If investment managers start reviewing their regulatory reporting processes now, they will be well placed to reduce costs and increase efficiencies. In order to make an assessment on what constitutes efficient reporting, asset managers need to have a more complete offering than ever before.

This includes adopting a more service-oriented approach that provides trustworthy, real-time positions, centralizing all information into one central location for client reporting. Having accurate and timely reporting may not solve all the headaches asset managers face, but it does at least move the issue on from something that is endlessly debated to a tangible solution that allows asset managers to focus their efforts on expanding services to investors, as opposed to being weighed down by heavy reporting administration.

Related content

WEBINAR

Recorded Webinar: Improving data integrity to address regulatory requirements

Financial institutions today face a global regulatory landscape characterised by rigorous and varied reporting requirements across their businesses. Reporting challenges include completing more data fields across more lines of business with greater frequency, adding complexity and cost. At the same time, there is waning tolerance among supervisory bodies for errors, issues or delays – as...

BLOG

CubeLogic Launches New Risk-as-a-Service Solution

Enterprise risk management specialist CubeLogic this week launched a brand new risk analytics solution in partnership with capital markets technology firm Numerix and London-based IOWArocks (formerly MDX Technology), a global marketplace for data, technology and services. The Risk-as-a-Service (Raas) platform provides advanced risk analytics as a fully managed solution, targeting both capital markets firms and...

EVENT

RegTech Summit Virtual

The RegTech Summit Virtual is a global online event that will be held in June 2021 with an exceptional guest speaker line up of RegTech practitioners, regulators, start-ups and solution providers to collaborate and discuss innovative and effective approaches for building a better regulatory environment.

GUIDE

RegTech Suppliers Guide 2020/2021

Welcome to the second edition of A-Team Group’s RegTech Suppliers Guide, an essential aid for financial institutions sourcing innovative solutions to improve their regulatory response, and a showcase for encumbent and new RegTech vendors with offerings designed to match market demand. Available free of charge and based on an industry-wide survey, the guide provides a...