Leading financial services firms are no longer looking at their technology platforms as rigid structures. These firms—including some of the top asset management organizations—are exploring the concept of a technology “ecosystem” that supports rapid change with a high degree of flexibility and adaptability.
Last week, I shared the the benefits of a modern, back office function for asset management firms. Now, let’s take a closer look at the ecosystem concept and the steps firms can take to help them adopt this approach.
The ecosystem concept enables asset management firms to take a “pay as you go” approach, avoiding large upfront capital expenditures. Software and solutions can be purchased on a modular basis, so that disruption is minimized. Not only does the ecosystem provide support for core processes, it also provides the agility needed to introduce new capabilities quickly and efficiently.
There are a number of key steps asset managers should follow before undertaking major transformation initiatives, including:
- Discuss the current and future needs of internal stakeholders in areas such as research and portfolio management, investment administration, and trading and compliance.
- Align the technology platform with the chosen operating model.
- Determine the governance of the transformation project and of the IT technology platform going forward.
- Map out the architecture and ecosystem with key software components and suppliers identified.
- Reach agreement on budget, a roadmap and a timetable for implementation.
Rather than relying on aging platforms, asset management firms can now explore specific software solutions that fit into a flexible, highly adaptive ecosystem. As asset managers explore new avenues for profitable growth, the back office will increasingly be the backbone of a high-performing firm.
To learn more, download: Designing a Modern IT Ecosystem for Asset Management Firms (PDF; opens in a new window).