Skip to main content

Unlocking Scale in Asset Management: Harnessing Technology for Exponential Growth

Linedata held an invitation-only, virtual thought leadership event with a select group of operations and technology leaders from asset management firms to discuss how modern technology platforms can lead to new, competitive offerings and develop a productive company mindset and culture. 

​​​​​​​​​​​​​​​​​​​​​Discussion takeaways:

  • ​​​For asset management firms to grow and stay ahead of the competition, managers must learn to employ technology beyond basic order management and trading software. Firm leaders who free themselves from laborious ‘document jockey’ roles by leveraging modern technology can reap the benefits of increased team capacity and internal efficiency.
  • Automation, artificial intelligence, and cloud-based solutions are constantly evolving technologies that enable asset managers to respond faster and more efficiently to shifting market dynamics, expand their service offerings, and scale and drive growth.

Linedata held an invitation-only, virtual thought leadership event entitled, "Unlocking Scale in Asset Management: harnessing technology for exponential growth" with a select group of operations and technology leaders from asset management firms to discuss how modern technology platforms can lead to new, competitive offerings and develop a productive company mindset and culture.

The Future of Automation

Panel moderator Philitsa Hanson, Head of Transformation at Linedata, asked panelists where their firms have recently seen the largest gains in automation and where trends in automation are heading.

The panel agreed the virtue of automation is that it removes the need for repetitive, tedious manual tasks that make up much of a human worker’s day-to-day. Asset management firms are automating previously manual pieces of operational flow, including client onboarding and activity management, to rethink dated legacy processes and market standards, and to more efficiently access and gain insights from data.

“DTCC plans to keep fundamentally rethinking and automating manual legacy processes to ensure we’re still delivering a premier service to our customers,” noted panelist Mark Bouchea, Managing Director of Institutional Trade Processing and Product and Solutions at DTCC. “We have been automating Standing Settlement Instructions (SSI) details and have seen gains in automating different pieces between products.” For example, DTCC has benefited from transitioning away from the allocation confirmation workflow toward platforms for the central matching of cross-border and domestic transactions that automate the trade confirmation process across many asset classes.

“Parametric is a systematic investing shop so its ethos is rules-based order generation and the scalability and automation that has driven a lot of the business benefit,” noted panelist Ranjit Kapila, Chief Technology Officer and Head of Operations at Parametric. “Lately our focus has been on client on-boarding, activity management and automating the workflows there.”

Panelist Justin Ryder, Head of Solutions Engineering at Linedata, pointed to automated testing capabilities in software development cycles as fundamental to the consistent, higher quality software the firm produces today.

Automation, artificial intelligence, and cloud-based solutions are constantly evolving technologies that enable asset managers to respond faster and more efficiently to shifting market dynamics, expand their service offerings, and scale and drive growth.

Cloud is Integral

One way that asset management firms can embrace the benefits of automation is by pivoting to cloud-based platforms.

When discussing the benefits of moving to the cloud, Ranjit shared his firm’s cloud-native perspective: “It’s a big part of our future as we integrate, scale, and develop Parametric’s platform.” Cloud-based platforms are cost-effective, and they enable firms to better control cost base and model scalability, and to deploy services and delivery strategies with more confidence and scalability.

These benefits aren’t limited to building new platforms, however. Mark noted that DTCC is moving existing tier two and tier three applications to the cloud. “We’re confident that we will continue to work with those providers to be able to support our tier one applications. Cloud is absolutely a big part of the way we want to re-architect our services.”

Modular Solutions and Adaptability

The past couple of years have seen a great deal of growth in trade automation, as a result of wild swings in the market and average daily share volumes. Asset management firms need solutions that are structurally sound and poised to handle not only this evolution, but also the rapid change that takes place outside the normal scale of software and solution implementation.

DTCC constantly architects their systems and applications to ensure they can scale and support two and a half times their volume, according to Mark. In a further effort to modernize, the firm is building more module-based services that interface “less as monolithic applications and more as individual services that have a lot of scalability and resiliency built into them”.

What Parametric optimizes for is business growth and peaks. The firm saw spikes ten times their typical volume last March, said Ranjit, pointing to the necessity of automation in high-volume environments. “Designing for that elasticity and horizontal scale is well-addressed through cloud innovation,” he added. A big part of Parametric’s efforts address efficient trading workflow – which had 1.4 million items running through at peak last year. Ranjit pointed to the challenge of now requiring the broader industry ecosystem to be cloud scalable as well, as breaks in downstream operations can create havoc in operational workflow.

The ability to identify and handle client and system behavior that can introduce risk is crucial, Philitsa added. “Really what we're talking about at its heart is change management,” she concluded. “No kind of lasting improvement occurs without successful adoption.”

For a more in-depth analysis, watch this video from the event.