Arcons Technology

The financial services industry has seen significant change over the last decade. Perhaps retail banking has seen the most change, particularly from a consumer’s point of view. Here technology is at the forefront of a new user experience and radically changing the relationship between consumers and providers.

At the other end of the spectrum, we see wealth management, where the operating models and client interactions remain largely unchanged. I believe this will begin to change over the coming years, but perhaps not to the same extent as the retail world. There are many justifications for this more conservative approach, particularly at the high net worth end of the market.

Although I do not foresee radical changes to the operating model, this does not mean that technology cannot transform the industry. The underlying ethos of wealth management is trust, and this is often portrayed through personal relationships. Wealth management is also a more complex business than retail banking and in most cases investment strategy is a reflection of a wide range of factors. AI and other technology advances can provide multi-faceted logic, although, in many cases there is also an important emotional aspect to individual investment, which is far harder to replace by AI.

There is plenty of discussion on technology’s impact in the industry, much of it focusing on the client experience and digitalization. In my view, the most undervalued area for transformation with the greatest capacity to deliver a return on investment (ROI) is scale. Scale is often thought of as becoming a huge firm with significant market share, but the dictionary actually defines scalability as “the ability of something, especially a computer system, to adapt to increased demands”.

If firms also viewed technology through this lens, rather than a focus on disruptive change, they would yield stronger and more defined benefits. Using technology in this manner ensures you can bring leverage to existing proven processes and business units. It will allow profitable and popular functions to reach a wider range of stakeholders. Well-designed technology will allow users to control and manage tasks and bring true scale, providing greater returns for clients and firms at the same time. As an added benefit, more time would become available for valuable staff members to work on more rewarding tasks, from both a professional and personal standpoint.

Whilst automation is a broad subject, the front office is one area where it can bring significant change. One example being portfolio construction, where a series of investment decisions can be applied quickly and effectively to a large number of portfolios. Smart applications will acknowledge and support the individual nuances and allow high quality human skills and knowledge to be maximized.

The wealth management industry is on the cusp of change. How technology is utilized will be the defining factor in a firms future success. The managers that can maximize their ROI in both technology and people will be the winners going forward.

If you want to be a player in this space, it’s time to act. The choice is yours! Learn how our powerful reporting solution can help you deliver the customized performance data your clients need. Visit www.arconstech.com

A quick Google search of “high profile spreadsheet errors” will turn up enough examples to scare any C-suite executive still relying on them, and in recent years, some of these figures have been large (in the billions, not thousands). Simple mistakes made by competent professionals can have significant impact when those calculations are being used to make financial decisions. Not only can these errors cost firms money directly, they can also come with additional fines from regulators that turn injury into… more injury. The good news is that there are other options than to rely on a complex spreadsheet.

The most common reasons cited for financial errors from using spreadsheet based data management are copy and paste, typos and formatting errors. More rarely, but with greater impact, is when an expert professional is out for the day and a substitute needs to execute a macro that only one person really knows how it works. A reliance on spreadsheets is actually a reliance on absolute organizational perfection, not to mention a key employee risk. Yet, despite the lack of oversight and formal controls, these calculations are still used by finance, accounting, sales, and operations to make critical business decisions.

Another complication is, who owns the actual data that is fed into spreadsheets. Data often sits in multiple business lines and may be touched by a number of departments before it is consumed by the spreadsheet user. No one person or group is tasked with validating the set as a whole. Unfortunately, there is no practical way for the end-user to know what is right or wrong when delivering their conclusions that result in financial decisions.

These spreadsheet risks are recognized by front, middle, and back office personnel as a real problem. Sometimes groups are afraid to take on what seems to be the daunting task of replacing spreadsheets in favor of a stable application that validates data and ensures consistency in calculations. At the same time, the increasing potential for financial risk has become too pressing to avoid.

If you want to be a player in this space, it’s time to act. The choice is yours! Learn how our powerful reporting solution can help you deliver the customized performance data your clients need. Visit www.arconstech.com

Life is a series of choices. We’re taught we can’t have it all, that we must pick one thing or another. And with every choice comes an inevitable opportunity cost. Wealth managers face the same predicament when determining and implementing their business strategy. Or think they do.

“If we do this we can’t do that.”

“We must focus our investments.”

“We should be the best in this niche, rather than trying to capture it all.”

Today, wealth managers have a more varied mix of prospects and clients than ever. At one end are the traditional, older generation of customers. They often prefer to meet in person. Trust is a major part of the relationship. At the other, the younger generations—including the growing and increasingly important millennial category—have different needs, tend to be more tech savvy, prefer digital solutions and have lower levels of trust. And in between are all the rest, clients who may not fit neatly into one group but share the servicing preferences of both.

In this environment, technology-enabled efficiency, accuracy and responsiveness have never been more important.

Three paths to success

So yes, wealth managers must make a choice. But it doesn’t have to be an either/or decision. You can service a diverse client base…if you opt for a flexible and rounded operating model. Here are three areas worth exploring: outsourcing, internal culture and business development.

By outsourcing all tasks and operations that don’t provide a competitive advantage, you can free up resources and time to focus on what matters most to clients. It will also reduce your debt in legacy technology.

Establishing an internal culture that focuses on the ongoing development of all parts of your business is crucial, as opposed to a “buy and hold” strategy where you acquire technology and let it live on its own until the time for a new project comes along.

Lastly, focusing on business development. Keeping an ongoing, non-online dialogue with peers, vendors and consultants will provide you with the latest information on market trends and activities, the possibilities available and how those can impact your business.

So, is your business strategy ready for the challenges and opportunities that today’s investment portfolio management software offers? It starts with a full and frank review of your entire technology stack, to ensure you have a business model that meets your different clients’ specific needs, while stripping out those legacy technologies and operating constraints that prevent you from becoming and remaining truly competitive.

If you want to be a player in this space, it’s time to act. The choice is yours! Learn how our powerful reporting solution can help you deliver the customized performance data your clients need. Visit www.arconstech.com.

Here are the seven signs that will tell you if you have a decaying system and how it must ideally operate:

• Facing difficulties while managing data due to disparate systems?

Maintaining data in different systems or manually moving move data from one system to another will lead to data inconsistency and errors. Is your data quickly identifiable, consistent across multiple systems, complete, accurate, and reconciled among different systems? If your answer is a NO to any of these questions, you must reevaluate your platform. Your system must be able to eliminate manual data flow, update all the data with a single change without requiring multiple data entry, deliver timely and accurate reporting including intra-day reports, and make data easily traceable.

• Are your client communications professional?

Investors expect your reporting to be clear, concise, and highly customized to their needs. This statement holds especially true for institutional and high net worth investors. Organizations that can meet these expectations will have an immense competitive advantage over those that cannot. If your current system does not deliver the level of reporting your clients expect, you will run the risk of falling behind.

Your client expectations are not limited to the form and content of reporting, but also to how you deliver information. They expect instant access to real-time information, be it through a web portal or a mobile platform. To stay relevant and highly competitive, your systems must be flexible enough to send and receive communications via any channel of your client’s choosing.

• Struggling to cope with complex global investments?

Dealing with multiple regional and global investment regulations is a daunting task. The industry regulations require you to maintain reliable, accurate, and transparent data. To comply with these regulations, you need Workflow Management, Data Management, and accurate reporting. Managing risk and maintaining accuracy is critical to comply with regulatory reporting requirements. With the increase in data sources and data complexities, your organizations need solution providers who can help you manage your data. Your system must not only be scalable but also provide actionable business intelligence in a format that is easily understood.

• Finding it hard to achieve Integration of disparate systems?

Real integration is not a matter of simply connecting systems – your systems must be able to talk to each other seamlessly. Manually moving data from one system to another affects your efficiency, thereby increasing the risk of errors. Integrating disparate systems not only reduces these risks but also improves efficiency by ensuring that the back office and front office personnel can view transactions, cash positions, and holdings identically. This ensures that the entries are recorded accurately in your Investment Book of Records (IBOR).

Many organizations use multiple systems for accounting, reporting, reconciliation and managing client information. If different vendors have provided these systems, making them talk to each other could be a challenging process. If you have workarounds or portfolios that reside outside of your legacy system, it is time to rethink its usability. Your system must allow centralized and standardized portfolio management activity. In an end-to-end portfolio management solution that is built on open architecture, the work of multiple systems is consolidated into a single platform. Such a solution will allow easy access to third-party systems or any other system that is built in-house, thereby enabling you to reduce technology footprint while driving greater efficiency.

• Escalating legal and compliance costs?

The compliance costs of regulations are overtaking many budgets. Additionally, aggregating data from different systems for compliance reporting is a risky and resource-consuming process. To reduce these risks and costs simultaneously, your system must be prepared to deliver consolidated reporting, by leveraging automation, integration, and standardization of data from various sources. Your systems must also eliminate the manual compilation of data for reporting, thereby increasing efficiency and cutting associated compliance labor costs while ensuring integrity, consistency, and reducing your operating risk.

• Being scrutinized by Investors’ due diligence?

Investors have also become increasingly tech-savvy; they are asking the right questions and know what to find. To remain competitive in this vital market, your system must stand up to the intense investor scrutiny. You must show that you have the controls in place to manage the risks efficiently and that you are already adhering to well-organized processes. If Investors sense any gaps in your workflow and find that you are dependent on manual processes and workarounds, they will take their money elsewhere.

• Legacy systems are not supported, serviced, or enhanced in the way you expect?

A product is only as good as its provider. Is you provider paying enough attention to you after the sale with 24/7 support? Does your provider have a track record of continuous product updates? Do they provide product training? Are they attentive to your suggestions or new ideas? Your provider must provide long-term support if you want your new system to last. Your product must be scalable, flexible, and must be built on open source technologies. In addition, your provider must not only help you set up but also ensure that your systems perform optimally without any disruptions. A relationship is a two-way street; as such, providers must be able to respond to your issues quickly, and also help your business adopt new functionality as and when it is needed.

Arcons Tech is a leading provider of financial portfolio management software and services to the world’s leading institutional asset and wealth management firms.