Asset Managers – Exploring the Buy versus Build Dilemma

At the recent TSAM Boston event, the buy-side community came together to explore the latest challenges and opportunities against an ever evolving technology and regulatory backdrop. Over the day, sessions explored technology trends and tips for transforming operational capabilities to drive process efficiencies and generate business value.

As many asset management firms face the well-known ‘buy versus build’ dilemma, one panel explored what operations professionals should consider when approaching technology transformation:

‘Should asset managers outsource technology solutions or invest in developing them in-house?’

The reality is there is no one-size-fits-all approach. Each firm must evaluate its specific needs, capabilities, and long-term goals to determine the most effective approach – either by replacing or augmenting their existing systems with more agile and interconnected solutions.

Here’s the expert advice we heard from the panel…

Three things a COO should ask themselves when assessing change:

1. Can our current technology estate grow with us in the future?

For many firms that have gone down the route of developing their own proprietary technology, these highly customised, legacy solutions often lack the flexibility and scalability required to adapt to changing business requirements or integrate with modern, third-party applications and platforms. With data siloed across the organisation, firms find themselves grappling with increased operational costs, reduced agility, and an inability to leverage the full potential of their data.

As many firms are feeling the effects of more competition, fee compression, and volatile markets, modern technology enables firms to drive out operation inefficiencies now whilst establishing a sustainable framework for future growth.

2. What is the opportunity cost of relying on legacy platforms?

Modernising technology while sustaining top line growth doesn’t have to be a complex task. There are multiple revenue-generating opportunities that come with having the right data and technology solutions in place.

Instead of being limited to ‘buy versus build’, an interoperable approach to data management provides the critical functionality needed to bridge the gap between new and existing systems. This allows users to enhance functionality whilst interacting with existing technology, algorithms and processes.

3. Are we equipped to adapt to evolving market demands and regulatory changes with our current technology infrastructure?

Inflexible systems lack the ability to ingest and master increasing volumes of complex investment data, as well as the ability to adapt to swiftly evolving business requirements and regulatory changes . This potentially limits an asset manager’s ability to seize emerging opportunities and navigate industry shifts effectively.

Continuous planning and adaptation allow firms to reassess priorities and adjust accordingly, rather than undergoing disruptive, large-scale change initiatives. With a flexible data foundation, firms can adapt quickly and easily without having to re-architect their whole estate further down the line.

FINBOURNE Technology

At FINBOURNE, we combine extensive technical expertise in financial services data management with a best-in-class, open, cloud–based investment management and servicing product ecosystem.

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