[ M A R K E T R E V I E W | H F A ] partnerships with FinTechs that are specialists in middle-office technology. Earlier in 2018, MUFG Investor Services partnered with Point Nine’ s outsourcing platform, Circle, in order to expand its business process outsourcing( BPO) technology. JP Morgan also struck a deal with post-trade technology firm Arcesium at the back end of last year to use its middle- and back-office software, which will support its fund administration platform. These partnerships are often used in combination with their own proprietary technology, in order to process the vast amount of data needed for middle-office outsourcing services.“ With the amount of data JP Morgan handles, we want to optimise the delivery to the client in the most effective and useful way possible. From a data delivery perspective, we are trying to combine all of our hedge fund data with a high-touch service model,” adds JP Morgan’ s Kehoe. The expansion of middle-office capabilities, along with the move into the front-office, shows how client mandates will now largely involve a full front-to-back service, with data management at the core.“ All of the major mandates are full front-to-back solution-driven. The client wants to understand everything they can get out of a strategic partnership, and how they can make things more efficient over time, how they can leverage the best technology, and look for the best output,” adds SS & C’ s Greaves.
Transparency becomes crucial With data management becoming such a focus for the fund administrator, clients are also expecting a certain level of transparency over the collection and processing of that data. According to alternatives investment research provider, eVestment, this trend has been partly driven by MiFID II, which has influenced clients regularly requesting updates over their data in order to comply with the rules. One potential solution is for fund managers to have greater access and transparency into their own databases held at the administrator. This will allow greater real-time reporting, as well as the ability to give them a more structured data set in a customised format.“ From a client service perspective, it makes absolute sense for them to have better access to their own data in real-time,” explains Kehoe.
“ In an ever-changing regulatory environment maintaining the additional data requirements, in a scalable and controlled environment, puts a lot of pressure on hedge funds. Accessing their own data to allow them to meet requirements such as Annex IV, Form PF or CPO-PQR while maintaining flexibility of how they use
“ More administrators are becoming involved with OMS in order to get into the front-office.”
JAY PELLER, HEAD OF FUND SERVICES, CITCO
the data in valuable.” Citco has already adopted cloud-based technology by Amazon Web Services( AWS) and Google to allow this.“ Nowadays we are taking in massive amounts of data, enriching it, and shooting it back to the client. NAV and financial statements are downstream and are not as time sensitive, but we are now using the cloud to facilitate a lot of our clients’ new data requests, in addition to exposing all of our systems to clients for real-time data,” says Peller. The future of fund administration will whole-heartedly be based on the ability to meet the demand for data. Administrators will have to manage the entire flow of data from the front-office to the back, and then be able to provide that level of transparency back to the client. In order to stay competitive in an ever-consolidating world, administrators will have to come up with a plan fast to stay relevant.
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