Reconciliation is the Hub of the Administration Lifecycle
Fund administrators are poised to migrate to new ways of doing business on behalf of their end clients. In fact, migrating to new processes through technology is becoming a “must-have.” Automated, intelligent, flexible, and scalable solutions now allow administrators to operate more efficiently for the benefit of their clients with minimal disruption. And reconciliation is at the heart of the transformation.
What the Emerging Environment Means for Fund Administrators
Operating in the current environment seems daunting. Technology approaches that digitize and automate processes, reducing dependence on people, are now essential. And as these approaches involve machine learning the insights, efficiency, and productivity gains are significant.
Coming off the larger environmental challenges, below are issues that administrators must resolve each day:
- The need to be able to survive on low margin, looking for savings & efficiencies
In the past manual tasks were offshored to save costs, rather than automating. Focus was on reducing cost per transaction, however an increase in the costs of offshore locations, plus the inefficiencies caused by offshoring, have resulted in an increase to the overall cost per transaction.
- The required SLA times are compressing
Previously “follow the sun” was sufficient, but now automation is required for faster turnaround times.
- The need to be nimble
Support non-standard data from various entities — brokers, custodians, trustees and accounting system providers.
- Recon is at the core
Some recons are still manual or done using outdated/rigid technologies.
- Automation pre- and post-recon
Pre- and post-recon automation gives users trust in their data.
- Ability to have oversight
On operations teams across multiple locations and time zones.
- Very strict audit
Need to move to automation beyond most manual tasks such as 4-eyes.
- Many internal systems
Meaning more manual review & increased operational inefficiency, as well as increased costs.
- The same universe of data may be used for supporting different product offerings and services
Requiring further dependence on data enrichment, data validation etc.
- The accounting and operations departments
Reconciling the trading activity.
- Transfer agency department
Needs to reconcile shareholder activity.
Administrators Benefit from an Advanced Technology Approach
Advanced technology, be it on premises or Cloud, can take advantage of speed process and scale through automation, identification and resolution of errors, and machine learning for information. These lead to insights for better decision making, reduction of time and labor costs, reduction of errors and increased efficiency and productivity — all while allowing greater input from business and operations executives.
This approach leads to:
- Cutting-edge technology incorporating machine learning to consistently improve data quality for clients
- No-code, self-service data control and reconciliation platforms, rapidly deployed, to support end-to-end management of data quality through its life cycle
- The ability to support complex funds/portfolios — Hedge, Derivatives, Loans, Credit Products, Private Markets etc.
- Oversight with a transparent process
- Automation of the pre- and post-reconciliation process
- Fewer manual touch points in reconciliation
- Faster turnaround
- Reduce Risk — remove manual reconciliations
- Tracking SLAs, for incoming data — internal handoffs and end client deliverables
- Improved reporting
- Customer consultation enhancements to reconciliation capabilities support front office data control, middle office, transfer agency and investors services
Conclusion
As administrators migrate to the new environment, criteria such as quality, effectiveness, and build or buy will have long term impacts on their operations. An analysis that takes into consideration long-term goals and optimal outcomes need to drive the internal decision-making process.
Download the Fund Administration fact sheet below.
.png)
