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Don’t forget the humans: a balanced approach to asset management operations and fund administration

A Q&A with Gary Brackenridge, Head of Asset Management at Linedata.

This Q&A with Gary is adapted from an interview which appeared in Clear Path Analysis's Fund Technology, Data & Operations, North America 2021 report. The report facilitated discussions between thought leaders related to operational resilience, operational risks and cyber security, and emerging technology data considerations.

Millions of employees in all walks of life are rethinking their job experience and work-life balance. What challenges does this pose for operational leaders in the asset management industry?

Our industry is a knowledge industry, and it takes real experience and expertise to provide good operational support to businesses. Recently, there has been a dynamic change in the employment space, globally, highlighting that key-person risk is a front and center issue. This issue also concerns attracting and maintaining talent in a post-pandemic environment. How do firms provide that sense of community and culture and increase job satisfaction in these uncertain times? How do you onboard someone new and help them feel they are part of the team? The job market is now dislocated globally, meaning that the skills required versus those available are disproportionate. Firms must also understand what direction they want to take with their technology – buy versus build.

How can technology help firms manage costs, ensure business continuity, mitigate key-person risk, and deliver quality customer service in the era of ‘the Great Resignation’?

We have begun to view technology and business differently over the past 10-15 years. Technology has often been viewed as a cost-saving tool, helping firms scale faster while hiring fewer people. However, we should start thinking about technology as a driver to help attract and retain talent. Knowledge comes from people, not from technology, and we will always need people in our industry. Technology can help us express this human talent and enable firms to develop competitive edge. For instance, if you want to take an Uber, you request a ride on your phone, which is leveraging technology. I got in an Uber recently and it was a Tesla, which provided a much better experience for me, the passenger, as it was quiet and very comfortable, but also for the driver, who was having a better day. The Tesla rerouted us around traffic and provided automatic braking whenever we got cut off by a car. Applying that analogy to our industry, we have developed an ‘Uber technology’ model within asset management operations and fund administration and have several examples of leveraging technology to improve both employee and client experience. When you have a knowledge industry populated by operational staff who are having a good experience with their technology, the result is a better experience for the end client. As an industry we must start thinking about technology as dual enabler; a tool for increasing operational efficiency, as well as an attraction and retention vehicle for staff that also helps enhance client satisfaction.

How can technology help firms attract and retain the best talent in operational roles?

In operational roles, one of the things people dislike most is repetitious tasks. Constantly amending things that should work properly is not a rewarding job. While this may sound obvious, our industry has often struggled to bring intelligent operations to the traditionally defined middle and back office of the marketplace. If we think about technology in the context of attracting and retaining talent, this means enabling employees to leverage their knowledge and skills. As a technology company, we think about the jobs that our customers’ employees need to do and we are bringing technology to market that makes this work meaningful.

This Q&A with Gary is adapted from an interview which appeared in the Fund Technology, Data & Operations, North America 2021 report.

What role will Artificial Intelligence, Machine Learning, and other emerging technologies play in back-office operations?

They may provide the answer to the conundrum we face as an industry. We have worked for years to try and automate as many of our back-office processes as we can, but we have reached the natural limit in most organizations. Emerging technologies, particularly the usage of machine learning and AI, provide the tool we have been missing to elevate and further automate the remaining repetitious jobs in our back offices. These technologies are promising, and we have created a product called Linedata Analytics which specifically uses machine learning to identify and change operational outcomes, removing the potential for human error as much as possible. This is a joint venture with qualified staff and not a replacing game to get rid of people. It brings a level of intelligence to the system which frees humans to use their brains and skills on more fulfilling – and value-added – tasks. We are also helping firms drive digital transformation by enabling them to manage their fund administration applications on a modular, web-based “fund administration hub”.  This provides a common user interface, digital workflow management, data visualization tools, and exception-based process management, so staff can focus on the most important activities and work together smoothly, regardless of location.

How are evolving investor expectations changing the demands on middle and back-office operational teams and leaders? What role can technology play in addressing these demands?

Constant, on-demand access to deep and accurate information has become an expectation of the investors our industry serves. This information is provided by middle and back-office teams and systems. Technology is finally enabling us to provide instant access to such information and the data that supports it. ESG is another area where investor expectations align with advances in operational systems and technology. ESG as an investment thesis is not a fad but a fundamental structural addition to how firms manage money and how investors want to see their money managed. If we go back to my Uber example, we need to utilize ‘Uber-style’ technologies in order to reach this level of transparency. If you think about what you get with Uber, you go on the app, you put in what you are trying to achieve, it tells you the price, it finds you a driver, you can see the driver accept the job, you can see the driver coming towards you, you know who it is when it arrives, they know where to go, you can track the entire trip, you get a receipt at the end. This is a very powerful analogy and the opportunity for us as an industry to provide those kinds of technology solutions in the context of what investors want to see makes this a very exciting time for our industry.

About the author, Gary Brackenridge

Gary Brackenridge is the Global Head of Asset Management at Linedata, including overseeing strategy for Linedata AMP and Linedata’s Fund Services offering. Previously he led Global R&D together with North American Asset Management. Gary’s passion is transformative solutions for investment managers and he directs a global team bringing innovative technology and service offerings to the market. His 20-year career in capital markets technology has focused on solutions for investment managers and their service providers.

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