Over the past decade, there have been significant shifts in investment technology and how investment managers think about their technology. What was once a tactical afterthought now takes center stage as investment managers seek every advantage in a complex and evolving market.
This change has caused many firms to wonder how to best leverage their technology investment to achieve operational success.
In this blog post, we address this question and explore how the evolution of investment technology has given rise to a new model: the investment ecosystem.
Today, as the investment ecosystem emerges as the gold standard of investment technology, we’ll highlight how investment firms use this model to maximize collaboration and agility.
Over the last decade, much of investment technology development has focused on addressing the 'swivel chair effect' – eliminating friction between the OMS and EMS in the front office and increasing efficiencies in accounting and reporting in the back office.
Investment managers benefitted from these developments as they let them streamline systems and data while giving them access to improved functionality and better, more actionable insights. Less "swivel" also freed up valuable time for individuals across the firm, enabling them to focus on higher-impact tasks such as client relationship management, strategic planning, and risk analysis.
However, with no shortage of challenges in the industry, conquering the "swivel" didn't mean technology providers' work was done.
What investment managers needed next was a more seamless solution that could simplify the complexities they face in addressing these challenges and better connect data, tools, and teams across the firm.
To meet these ever-growing demands, enterprising technology providers began taking steps to enable more seamless connections in what has become known as the investment ecosystem model. Many of these providers leverage a platform approach to not only better unify investment managers’ operations but also provide options for how they build their investment ecosystem and agility in evolving it as their firms grow.
Since the start of the ecosystem era, certain clear benefits have emerged. We foresee these benefits only continuing to grow in the coming years. These benefits include:
The interconnectivity and data consistency provided by an investment ecosystem strengthens communication among traders, portfolio managers, and other members of the firm, enhancing processes and opening the door to greater collaboration and innovation.
This interconnectivity also offers better access to external counterparties, introducing new ways to work with vendors, partners, brokers, and peers.
This enhanced flow of data and ideas is only intensifying the industry's rapidly evolving nature.
In an investment ecosystem, new tools are faster and easier to implement from existing or new providers as the business grows or markets evolve, often with very minimal disruption to day-to-day functions.
The scale of an investment ecosystem offering, as well as the ability to layer in managed services, simplifies firms’ operational landscapes and underlying technology stacks and reduces costs.
More standardized and easy-to-enable modules and firmwide data consistency mean less risk. This allows for a more holistic approach to compliance and regulatory requirements, allowing firms to stay on top of and communicate about changes or potential problems at every stage of the trade lifecycle. This benefit is passed on to and recognized by today's risk-conscious investors.
Although the best vendors will continue to offer gold-standard service and support, investment managers are empowered with the flexibility to mix and match the front-end modules of their platform without the need for development or changing code, giving them more control over their operations than ever before.
Time once spent going back and forth with vendors about integrations or custom work can now be reallocated to higher-impact tasks.
With the ability to quickly and easily customize interfaces and modules to fit each firm's workflows, challenges, and priorities, all ecosystems will look different, allowing managers to dive deeper and better execute their key differentiators. This also allows investment managers to better tailor their offerings to the unique preferences of their clients.
With increased interoperability comes better and more complete data. Firmwide data consistency and a single source of truth paint a more holistic picture of the firm that managers can use to make better decisions and be most effective.
This new era of investment technology offers many exciting benefits. But as technology becomes more open, risk, security, and support – and the need to validate these practices – become critically important.
As you select a provider to build your investment ecosystem, ensure you pick one that adheres to the highest standards in cybersecurity, is operationally resilient, and has a long track record of investing in and providing quality services and solutions you can trust.
In addition, the level of support your technology partners offer is incredibly important.
The first time you need assistance, you don’t want to learn that your vendor’s support model consists of a centralized call center where inquiries are passed from one overly specialized group to the next (and back) without actual resolution.
To ensure you’re selecting a technology ecosystem partner that offers a first-rate service experience, ask about their support infrastructure and how heavily they invest in these groups.
The best service experience will come from a globally dispersed and well-equipped team of experts with the technology and industry know-how to solve any challenge you may face.
At SS&C, we invest more than $110mm annually across wealth and investment technology platforms to ensure we're always on the cutting edge of what's next for the investment management industry.
We’ve used this investment to enhance the interoperability of our platforms – introducing new, innovative ways to bring together the tools, data, and insights our users need to run their firms into a single, seamless experience.
The Genesis Platform is built on a unique, centralized data lake house architecture capable of storing any type of data while offering users a single operational experience and point of entry across portfolio management, trading, analytics, accounting, and reporting components, as well as a single source of truth for firm-wide data.
In an increasingly complicated, competitive, and fast-paced market, The Genesis Platform’s ability to scale, adapt to firms’ unique needs, and simplify complexity provides unmatched value.