An interview with Lars Moestrup, Global Head of Customer Experience at SimCorp.
Q: What has been the historical buy-side client engagement model and what are the key developments that have changed this model over the years?
The traditional approach in the financial software industry has mostly been a case of clients coming to a vendor for a solution to a specific problem. In these conventional scenarios, clients have only ever focused on what they deem to be the root of the problem, rather than looking at its impact on the business as a whole.
At the same time, without access to the whole business, many vendors have only been able to ask and not tell clients about the best way to manage the issue. As a result, we have ended up with decades of point solutions, bolt ons, sticking plasters, and fragmented architecture that have been desperately patched together, delivering only a short-term solution .
What we are now witnessing, in demanding market conditions, burgeoning regulations and increasing competition is the limitations of this approach. In fact, in many cases, this way of operating has even prohibited firms from accessing new opportunities, whether that is onboarding a new product, entering new markets or asset classes.
The days of patchwork efforts are very much over, but evolving from this towards a whole business approach, is a two way process. We know that the aforementioned pressures are costing ops teams money, time and resources. These are things buy-side firms cannot spare today. As a result, the way in which buy-side firms will consume services and solutions going forward is going to be vastly different to the way they have done, previously.
Going forward, ops teams will need to handover much more of the maintenance and running of operations to vendors, so that they can ensure they are focused on their core KPIs and supporting alpha generation. In turn, this will necessitate that the vendor takes on more responsibility than ever before, and will require a change, not only to the way they operate , but also what they offer.
Covering a wider footprint of investment management operations and being far more accountable for tangible business outcomes will become no.1 on the agenda, followed by increased guidance, insights and tools to help increase technology Return On Investment (ROI).
Q: How are vendors like SimCorp responding to firms, as their needs evolve?
In this new world order, rather than outsourcing the problem, clients will increasingly want to work with trusted partners that can take on the job of solving key operational headaches, and improve their overall competitiveness. To meet these needs, these vendors will need to pivot their own businesses, away from the delivery of tools and technology alone.
At SimCorp, we have already seen this take shape and have made significant strides towards holistically interacting with our clients. This is in turn is reflected in the introduction of managed services that respond to business areas such as regulations like SFTR, and the hurdle of data management. Here, SimCorp provides both a solution that addresses the operational workflow and a managed service that maintains and monitors it, ensuring ongoing effectiveness and coverage.
Shaping an effective offering will inevitably require vendors to gain a much deeper understanding of the client’s business and delivering a stronger level of commitment. It is our belief that firms will want to work with vendor partners that can deliver to their unique context, so that they can focus on the things that are core to them. We will need to understand not only their intended outcomes, but also the challenges that are standing in the way and how they can be solved to improve their competitiveness.
When we started designing the new Customer Experience Journey for SimCorp clients, we worked closely together with sales and consulting to create the right organizational structure, in order to best support this new way of thinking and working. It became clear to us, that combining the strategic and commercial interactions we have with our clients, together with insights and analytics we have gained across our user base, were key to successfully delivering Customer Experience Leadership.
Using an effective knowledge pool, built from 300 combined clients across SimCorp Dimension, SimCorp Coric, SimCorp Gain and SimCorp Sofia we can apply a deeper understanding of business goals, strategies and lifecycles, sharing relevant success stories, so that clients can get the most out of their technology investments, spend less time on operations and more time on their deliverables.