Read the article and learn about:
- How market events provide an opportunity to prepare and act for the future
- Why firms have a responsibility to address operational challenges and invest in resilience
- What are the key operational priorities that firmly place resilience on the business agenda
- The importance of a core operating environment for successful business growth
Executive Vice President and Managing Director, SimCorp North America
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Volatile markets can have a lasting impact on any buy side firm’s growth and resilience. Fast forward to 2020 and the same can be said of the global pandemic that hit the world out of nowhere. While these events have played havoc with buy-side business continuity and pushed firms’ resources and systems to new limits, they have also brought with them the opportunity to learn, act and prepare.
As the buy side adapts to a new normal, and reassesses the lessons from 2020, some may adopt a ‘wait and see’ approach, temporarily addressing problem areas, or further fragmenting investment operations with best-of-breed systems, when in fact simplicity is the key. What many firms overlook as they respond to the crisis at hand are that the operational inefficiencies revealed, present a unique opportunity to seek long term solutions that can embolden the operating model. Firms need to strike fast, while these business pain points are front of mind and ask themselves; how do we build the resilience that we need to react in these difficult situations? And is our operating model fit for purpose today and beyond? From what we hear in the industry, one of the biggest pain points felt in the recent crisis, is lacking the fast access to reliable investment data and one source of real-time investment truth, across the whole organization.
As a fellow colleague and previous risk manager says, ‘One thing is certain: the next crisis will come, you just don’t know when and what will trigger it’. If we have learnt anything from the cyclical nature of the financial markets, we know this to be true. As one of the biggest industries in the world, buy-side institutions have a responsibility to their investors and their employees to address their operational challenges and invest in resilience, not only to survive today, but to exist tomorrow. Many frontrunners in the industry have turned to tech innovation, which has proven to address operational efficiencies, improving scalability and achieving a robust buy-side response, not only during market events, but also to contend in a fiercely competitive global market.
Over the years, we’ve seen that the more complex investment strategies and market data gets, the simpler the operating model needs to be. One of the most effective technology innovations in the buy side, which addresses this exact need, is a core front-to-back investment management platform, with true automation and multi-asset class coverage. Powered by one investment truth, one code base across public and private markets, SimCorp has been delivering this innovation, continually evolving for 50 years to serve as the backbone for a global buy-side collective of over 200 of the largest institutional investors.
In the past year we initiated 18 new projects in North America alone, and many of these were delivered fully remotely as a result of COVID-19 restrictions. Like many others, 2020 was a pivotal year for us, and we’ve seen that our sole focus on software solutions and services, and our independence; being neither asset manager nor custodian, has resonated strongly with our clients, including some of largest asset servicers and custodians. Given these strong buy-side partnerships and a thriving global track record for implementing solid operational foundations, we’ve taken a best-practice look at the operational priorities, that we believe can help firmly place operational resilience on your business agenda for 2021.