SimCorp StrategyLab, a private research institution sponsored by SimCorp, has released a new whitepaper, which examines the increasingly critical role played by an investment book of record (IBOR) in allowing investment managers to gain a competitive edge.
The paper explains how the IBOR – defined as a real-time position-keeping record that provides up-to-date information about current, projected, and historical positions and cash – has become essential in today’s trading environment. Not least firms that operate on disparate systems across multiple providers, or with parts of their operations outsourced, will often have difficulties in providing a timely and accurate overview of available positions and investible cash.
This overview is critical for the front office to make well-informed investment decisions and effectively manage risk, particularly in an environment with increasing asset class complexity. In addition, regulatory demands are putting greater pressure on the need for quick access to consolidated data.
“Without accurate real-time position-keeping across all asset classes and covering events such as collateral, the front office will often be forced to spend valuable time reconciling and keeping own position records, though still facing the risk of wrong decision making and non-optimal use of assets,” said Marc Schröter, Head of SimCorp Strategic Research and one of the contributors to the paper. “An IBOR presents a ‘single version of the truth’ which gives firms the critical and accurate overview essential to maintaining a competitive edge and managing risk.”
The paper highlights 10 key requirements for investment management firms seeking to implement an IBOR, which will best position them for future growth and equip them to manage their data issues effectively. These touch a number of areas, including full instrument coverage to accommodate the widened investment universe, tracking of the position lifecycle and cash and security forecasting to cope with increasing demands for collateral. In addition, it should allow a firm to identify its entire exposure to a single counterparty at speed in the event of market pressure.
It concludes by examining how an IBOR can be used to counteract the dangers of so-called legacy systems, where firms are reliant upon overlapping, ageing technology, which has been updated piecemeal over a number of decades, by drawing on these separate sources to provide a real-time overview.
To download a copy of the paper, please click here.
Enquiries regarding this announcement should be addressed to:
Anders Crillesen, SimCorp Corporate Communications (+45 3544 6474)
Sophia Morrell, Greentarget, (+44 207 324 5487), [email protected]
Since 1971, SimCorp has been providing investment and portfolio management software and services to the world’s leading investment managers, asset managers, fund managers, fund administrators, pension funds, insurance funds, and wealth managers. SimCorp’s world-class software provides global financial organizations with the tools they need to mitigate risk, reduce cost, and enable growth. SimCorp is a global company, regionally covering all of Europe, North America, and Asia Pacific. Listed on the NASDAQ OMX Copenhagen, SimCorp is dedicated to supporting the global investment management industry, its clients, and its investors. For more information about SimCorp’s solutions, please visit www.simcorp.com/solutions.
IBOR technology critical to front office success, argues new whitepaper
SimCorp StrategyLab paper highlights expanding role of an IBOR in delivering competitive advantage to investment management firms from front to back office. Front office investment decisions and risk assessment are compromised when based on data from traditional accounting systems or provided by outsourcing vendors.