[ I N D E P T H | I N V E S T M E N T O P E R A T I O N S ] their IT operations , and it has come from increased pressure on margins ,” says Guillaume Lesage , chief operating officer at Amundi . “ What we felt is that we would like to provide more personalised solutions to our clients . “ We have invested a lot around IT for the last 10 years , throughout our systems and operations , and we have realised that it is a strength which has become a big differentiator . We have the methods and capacities to install software into asset managers that is unique .” Elsewhere , BlackRock is increasingly being used by investment firms to create new tools and services through its Aladdin Studio . Most recently , it rolled out Aladdin Data Cloud , a next-generation data solution that gathers the vast amount of data held across different custodians and fund administrators used by its investment manager clients . Powered by data platform Snowflake , the service will enable investment managers to bring Aladdin and non-Aladdin data together , expanding the utilisation of data for their entire investment operations . “ We continue to see tremendous demand from investment managers looking to use Aladdin Studio to build on top of their Aladdin platform . Whether that is creating the reports they need , building custom dashboards , or running applications – clients want to build out capabilities that support their unique operating models , and their distinctive IP ,” says Daniel Gourvitch , global head of platform for Aladdin , BlackRock . “ We have increasingly seen asset managers – including BlackRock – looking to streamline how they receive data from asset servicers . In particular , clients have inquired about using our
Aladdin Data Warehouse capability to bring together data from their custodians and fund administrators , next to their core portfolio data . The launch of the Aladdin Data Cloud will help asset managers do just that .” Collaboration is also increasing between asset managers and other leading technology firms . In January , a new technology company formed by PIMCO , Man Group , IHS Markit , Microsoft and McKinsey and State Street was announced with the aim of transforming operations technology for asset managers .
The company , named HUB , will build a cloud-based operating platform powered by the Microsoft Azure cloud , and will provide flexible and modular solutions across middle- and back-office functions , while also aiming to reduce cost and mitigate risks . The six firms said in a joint statement that the platform will accelerate the move to a digital operating model , enabling asset managers to deliver innovative solutions to their clients both now and in the future . In addition , the consortium also claimed HUB ’ s “ data-first approach ” will break down silos and friction between systems and data . The greenfield solution will utilise the latest cloud-based data technology and security to transform middle- and back-office operating processes , reducing costs associated with supporting numerous legacy systems and improving efficiencies by connecting to third parties . These kinds of technology-focused solutions that are able to take certain intermediaries out of the equation for a more automated process could resonate well with asset managers .
“ The custodian model in general is very people dependent , in which many have offshored to outsource processing locations such as India , making it still a very people-depended operation . You may reduce costs , but the risk of a manual disruption is still there . Asset managers would rather see a more technology , forward-based solution to limit the number of hand-offs , reconciliation and interference involved ,” adds Pushpaharan . “ There are opportunities such as blockchain to disrupt the traditional transfer agency space where all the participants are on the chain . You also have a similar opportunity in the middle-office , and tech companies would find solutions to limit that , and even eliminate the middle-office entirely .” Nevertheless , these developments will take some time for investment firms to get comfortable with , and in the meantime , many will continue to rely on the long-standing relationships they have established with custodians . Some are already tapping the data management platforms of custodians that have invested heavily in their platforms . BNY Mellon has already won a number of clients using its global data management platform , such as Janus Henderson which signed on as a client to consolidate all of its investment information into one global data store . At the end of last year , State Street launched its Alpha Data service , a cloudbased open architecture platform , which has been adopted by Vontobel Asset Management . In addition , many of the big custodians are increasingly referring to themselves as technology companies , with huge budgets dedicated to developing digital solutions and partnering with other FinTech firms to deliver innovative services . The transformation of investment operations will continue to be at the top of the agenda for most asset managers in the years to come , and more often than not , they will turn to their custodial relationships to support this change .
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