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The Future of Investment Management Technology: Operating in an Investment Ecosystem

 

Over the last decade, much of the focus of the investment technology industry has been on addressing the ‘swivel chair effect’ – eliminating friction between the OMS and EMS in the front office and increasing efficiencies in accounting and reporting in the back office.

These advances have benefitted firms by streamlining systems and data, giving them access to improved functionality and better, more actionable insights and freeing up valuable time for individuals across the firm to focus on higher-impact tasks. However, with no shortage of challenges in the industry, conquering ‘the swivel’ didn’t mean the work of technology providers was done.

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Beyond Solving the Swivel: Increasing Efficiencies Across the Firm

In more recent years, enterprising investment management technology providers began to look beyond the traditional OMS, EMS, and accounting workflows to discover where else users were ‘swiveling’ and how they could better serve them.

The Best of Both Worlds: Configurable & Flexible Solutions

To do so most effectively, the industry was forced to address two of its most fundamental solution dichotomies – custom vs. standardized and best-of-breed vs. all-in-one.

Custom vs. Standardized

Custom solutions can come with many downsides, from difficult-to-test workflows to costly upgrades. At the same time, lack of customization creates process inefficiencies and workarounds that can be error-prone or time-consuming. Additionally, such rigidity hinders the elasticity and flexibility firms need to scale technology as they grow.

Best-of-breed vs. All-in-one

Simply piecing together best-of-breed solutions can be clunky, failing to meet managers’ standards for a seamless user experience. However, that’s not to say the future of investment technology is only “all-in-one” platforms. Too often, “all-in-one" starts to feel like “one-size-fits-all," which can be limiting if it’s too standardized and lacks the ability to add and integrate features and components where necessary.

In each of these debates, the pendulum has swung from one side to the other and come to rest somewhere in the middle. Ultimately, the best technology providers combined the winning characteristics of each to craft flexible solutions that offer custom-feeling workflows but are easy to configure and that enable users to add necessary components but have a seamless user experience.

A New Frontier of Investment Management Solutions: The Rise of Interoperability & The Investment Ecosystem

Today, we are at the dawn of a new era of investment technology – the Era of the Investment Ecosystem.

The increasing popularity of cloud, microservices, and API technology over the past several years has given vendors the tools they need to create tighter integrations and do so in a way that is cost-effective and secure. This has taken the flexibility and configurability of the previous era to a whole new level and delivered new, innovative ways for firms to tie together workflows across more systems and partners into a seamless end-to-end experience.

Although this era is still in its nascent stages, certain clear benefits have already emerged, and we foresee these benefits only continuing to grow in the coming years:

Enhanced Firm & Industry Collaboration

The interconnectivity of an investment ecosystem creates new and enhanced channels of communication among traders, portfolio managers, and other members of the firm, enhancing how processes run and opening the door to greater collaboration and innovation. It also offers better access to external counterparties, introducing new ways to work with vendors, partners, brokers, and peers. This enhanced flow of ideas will only intensify the industry’s already rapidly evolving nature.

 

Access to Specialized Solutions

With the many challenges facing investment managers, there are a tremendous number of skilled providers designing really great, specialized tools that can’t and shouldn’t be overlooked. In an investment ecosystem, these tools are easier to implement than ever before – some with the simple touch of a button and without ever leaving the application.

 

Simplified Operational Framework & Lower TCO

The ability to do so can also help firms simplify their operational landscapes and underlying technology stacks and reduce costs by rationalizing the number of outsourcing relationships they must manage.

 

Decreased Risk

More standardized and easy to enable integrations and connections mean less risk for firms, a benefit passed on to and recognized by today’s risk-conscious investors.

 

Time Savings

Time once spent going back-and-forth with vendors about integrations or custom work can be re-allocated to higher-impact tasks. And although the best vendors will continue to offer gold-standard service and support, managers will be empowered with the flexibility to mix and match the front-end of their platform without the need for development or changing code, giving them more control over their operations than ever before.

 

Improved Differentiation

With the ability to quickly and easily customize interfaces to fit the workflows, challenges, preferences, and priorities of each firm, no two ecosystems will look alike, allowing managers to dive deeper and better execute their key differentiators.

 

Better Insights & Data

With increased interoperability comes better and more complete data, painting a more cohesive and holistic picture of the firm that managers can use to make better decisions and be their most effective.

 

Ability to Scale and Grow Faster

To keep up with the industry’s rapid evolution, firms need technology that’s not only elastic enough to accommodate growing and shifting demands but that allows firms to quickly and seamlessly connect to new systems and partners when they need to, enabling them to scale up rapidly.

Selecting a Partner You Can Trust: Open Technology, Risk, & Security

Although this new era of investment technology offers many exciting benefits for firms, it doesn’t come without associated risks. The more open technology becomes the more important risk and security and validating these practices is.

As you select a provider with which to build your investment ecosystem, ensure you pick one that uses the gold standard in cybersecurity, that is operationally resilient, and that has a long track record of investing in and providing quality services and solutions you can trust.

Your Provider’s Service Infrastructure & Investment

In this new era of investment technology, the level of support your technology partner offers remains incredibly important. You don’t want to choose a provider only to realize the first time you need assistance that their support model consists of a centralized call center, where inquiries are passed from one overly-specialized group to the next (and back) without any real resolution.

To ensure you’re selecting a technology ecosystem partner that offers a first-rate service experience, ask about their support infrastructure and how heavily they invest in these groups. The best service experience will come from a globally dispersed and well-equipped team of experts with the technology and industry know-how to solve any challenge you may face.

The Right Foundation to Build Your Investment Ecosystem

At SS&C Eze, we invest more than $40mm annually in our platforms to ensure we're always on the cutting edge of what's next for the investment management industry. And we’ve used this investment to enhance the interoperability of our platforms – introducing new, innovative ways to bring together the tools, data, and insights our clients need to run their firms into a single, seamless experience. Additionally, our solutions are backed by rigorous risk and security controls, and with 500 service professionals, the largest and most advanced service group in the space. If you’re looking for the right foundation on which to build your investment ecosystem, explore our solutions, and learn more about Eze Marketplace, SS&C Eze’s online store of ready-to-enable apps and solutions.

Eze Marketplace​  Reimagining the single platform experience.​