Enabling growth with automated investment processing
With a combination of in-house solutions and a legacy system built to meet the needs of two decades earlier, Aegon Asset Management (AAM) relied on some error-prone manual processes to carry out investment processing and accounting activities.
As a fast growing global asset manager, AAM was confronted with a disturbing reality – their investment management infrastructure was simply not capable of supporting the company’s growth ambitions. Additionally, the amount of manual processing represented both an operational risk as well as increasingly prohibitive costs. The solutions AAM was using which were partly in-house build, were no longer able to sustain it’s requirements. In short, AAM needed technology capable of addressing the investment processing complexities posed by current and future markets.
Wouter Peters, Chief Operating Officer at AAM Netherlands framed the situation as follows, “We had our systems in place since the early 1990’s. Over time, we had to introduce so many spreadsheets, workarounds and other manual processes that our straight through processing (STP) rates became unsatisfactory.”
It was clear to AAM that they needed to address the problem of excessive manual processes before the situation deteriorated even further. Primary focus was given to finding a solution that could:
- Improve the degree of automated investment processing to acceptable levels
- Be able to handle the unique accounting requirements posed by insurance asset managers
- If desired, be flexible enough that it could be deployed in/support multiple markets worldwide
"Implementing SimCorp Dimension has enabled Aegon Asset Management to increase automation and STP, while reducing risk and cost,” explains Wouter Peters, COO, Aegon Asset Management Netherlands.
Automated and flexible
After an extensive selection process, including the incumbent vendor, AAM determined that SimCorp Dimension was the solution that best fit their needs. As Wouter Peters says, “SimCorp was able to demonstrate the highest degree of STP (automation) of any solution considered. It was also the only solution capable of meeting our specific investment accounting requirements.”
SimCorp was able to demonstrate the highest degree of STP (automation) of any solution considered. It was also the only solution capable of meeting our specific investment accounting requirements
AAM was particularly impressed by the degree to which the automated SimCorp Dimension solution was able to remove a plethora of Excel sheets used for trade processing, fund administration and related investment operations. SimCorp Dimension demonstrated flexibility by supporting as many accounting frameworks as AAM requires, including advanced multi-currency accounting capabilities.
Automation up, risk and costs down
Since going into production in 2015, AAM has reaped the benefits of implementing SimCorp Dimension. Wouter Peters states, “For many of our investment processes, we have increased the degree of automation (STP) by more than 20%. In terms of investment accounting, we see similar improvements with even more expected once new enhancements are released. For trade processing, we have gone from no automation to more than 85%. These efficiency gains have allowed us to reduce headcounts by 15% as well as substantially lower our operational risk.”
In addition to these benefits, AAM is now able to connect with a much larger number of venues and custodians, granting far greater flexibility with respect to trade processing, settlement and related investment activities.
For trade processing, we have gone from no automation to more than 85%. These efficiency gains have allowed us to reduce headcounts by 15% as well as substantially lower our operational risk.
Poised to capture growth
Prior to implementing SimCorp Dimension, one of AAM’s challenges was that system limitations curtailed its ability to capture growth opportunities. With these limitations now removed, AAM is able to release and sell new investment products, leverage more venues, expand into new markets and realize its growth ambitions. In this instance, the investment management solution (SimCorp Dimension) acts as a catalyst to growth as opposed to a barrier.
The project: Exceeding original expectations
AAM was very pleased with the implementation of SimCorp Dimension. Without the experience of a project of this size and scope, AAM relied on the expertise of SimCorp and EY to ensure that the project ran smoothly. As the project progressed, there was an increase in scope. Despite this, the implementation was successfully completed within the original timeframe and within 2% of the original budget.
The implementation project was definitely ahead of the expectations of the organization
Once AAM went into production, there were no material issues. As Wouter Peters puts it, “we had a support team standing by to deal with any issues once the system went live. They really didn’t have much to do – the whole project went very smoothly.”
AAM understood that continuously adding manual processes and workarounds (to compensate for inadequate legacy infrastructure) was simply not sustainable going forward. By selecting and implementing SimCorp Dimension, AAM has benefited from much higher rates of automation, flexibility and connectivity. All of these factors have enabled AAM to pursue new growth strategies, reduce their operating costs and mitigate operational risk.
Name: Aegon Asset Management
Headquarters: The Hague, Netherlands
Industry: Asset Management
Aegon Asset Management is a global, active investment manager. We use our investment management expertise to help people achieve a lifetime of financial security, with a focus on excellence, trust and partnership.
Investors worldwide entrust Aegon Asset Management to manage approximately EUR 343 billion on their behalf. Positioned for success in our chosen markets (the UK, Continental Europe, North America and Asia), Aegon Asset Management's specialist teams provide high-quality investment solutions across asset classes.Through the Aegon Group our heritage stretches back to 1844, meaning we understand the importance of long-term relationships, robust risk management and sustainable outperformance. A long and successful history of partnership with our proprietary insurance accounts has enabled us to establish experienced investment teams, a solid asset base and proven long-term track records.