Adapt or fall behind: why embracing data-centric technology is key for investment firms

By Murray Campbell, Product Manager at AutoRek

The investment sector has often relied on conventional procedures and stringent regulations. However, coping with obsolete legacy software can impede an organisation’s growth and development. Despite being aware of these challenges, investment companies worldwide tend to persist with these systems due to the perceived high cost and complexity in implementing modern technology. 

As technology continues to advance and the world becomes more digitally dependent, there is increasing pressure on firms to ensure their buy-side operating model is as efficient as possible. While investment firms have typically prioritised the front-end of their product, the back-office is equally important as this is the engine that drives any organisation. This is particularly key in today’s rapidly evolving markets where significant rewards await businesses that can successfully deliver innovation and efficiency within their organisation.

Murray Campbell

The unforeseen costs of manual processes

When investment firms operate independently, they often end up utilising various platforms that offer similar functions. However, this approach results in the accumulation of expensive and disjointed systems, leading to inefficient workflows, high costs, and the need to maintain multiple vendor relationships. Such inefficiencies can hinder a firm’s ability to adapt to new market challenges and demands, which can be a major problem for companies in the long-term.

For many, the lack of suitable IT systems is the most common operational challenge UK investment businesses face. Many face obstacles when it comes to reliance on manual processes, an absence of suitable solutions available in the market, or a lack of resources available to invest in such solutions. In the dynamic realm of data management, the choice of tools and solutions is crucial for steering business decision-making and operational efficiency. Investors need faster, more personalised customer experiences and investment firms need to focus on providing seamless journeys – even in the face of economic turbulence and increasing regulatory requirements.

One area where organisations can greatly benefit from advanced technology is by reducing their dependency on spreadsheets. Currently, many buy-side investment managers are still reconciling data in spreadsheets or using generic platforms that lack key features. In fact, more than nine in 10 agree that their firm relies too heavily on manual tasks and spreadsheets, meaning that the UK investment management industry still has some distance to go to remove reliance on manual reconciliations. Relying on outdated methods can be a costly mistake.

The expansion of the digital economy, increasing transactional volumes, and ever-changing regulatory obligations have made it necessary to adopt more sophisticated solutions. Excel, for instance, lacks key controls and has limited auditability, making it almost impossible to track and evidence actions. As a result, organisations end up spending more resources and money to fix errors, leading to higher costs in the long run. Therefore, transitioning to more advanced solutions is crucial to ensure data accuracy, integrity, and scalability as they continue to grow and evolve.

How is automation changing the investment industry?

In the current digital age, management of complex operations is heavily reliant on automation. With the help of data-driven insights, automation can enable investment managers to make informed decisions, identify market trends, and optimise portfolio performance. By automating tasks such as validations and cash transfers, investment managers can ensure that data-related tasks are executed with speed and accuracy, freeing up their time to focus on activities where their human expertise and creativity can add more value.

According to a recent report by AutoRek, UK-based investment managers claim they are continuing to invest in automation, with 100% of respondents either maintaining or increasing their automation expenditure in the years ahead. Continued investment in automation is promising given firms remain too reliant on manual processes, particularly when it comes to reconciliations. Nevertheless, successful implementation isn’t about adopting every automation tool available. Instead, companies should focus on strategically selecting applications and carefully refining processes that are in line with their corporate objectives and unique requirements.

Act now or fall behind

The promise of emerging technologies lies in the ability to unlock new insights and improve productivity. But to use this technology effectively, modern infrastructure that can capture and validate large volumes of data in a scalable manner is required. Replacing manual processes with end-to-end automation can drive significant benefits for investment firms as it presents an opportunity to eliminate much of the friction around reconciliations, reduce operating costs, and liberate staff from repetitive manual tasks.

To conclude, the integration of data-centric technology is crucial. If investment firms want to remain competitive and innovative they must keep up with the demands of fast-moving markets. They must clear their data clutter and evolve quickly – or risk being left behind.


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