Building credibility in the face of resistance to change

Automating back-office tasks is the way of the future.

It’s the indelible image of market upheaval. Whenever there’s a hiccup on Wall Street – boom or bust – the financial press runs photographs of brokers on a trading room floor. Their hair is mussed up. Their ties are askew, their sleeves rolled up. Usually, a broker cradles his head in his hands or, alternatively, someone is looking up at trading screens, pleading for answers.

These images are irresistible. They make sense. They put a human face on financial news stories. But they don’t really illustrate how the market works anymore.

In 2014, MarketWatch decided to stop running trading floor photos because they no longer depicted the reality of the industry. Brokers, for the most part, no longer trade from Manhattan’s Financial District. Technology have changed the game. There was resistance to the news outlet’s decision. Pushback against change is nothing new. To truly empower private capital, however, the financial services industry should acknowledge the new normal, however.

That was the message of Michael Gull, the Chief Revenue Officer of 4Pines, a fund services company, when he recently spoke during a webcast with Harmonate CEO Kevin Walkup to discuss how fintech can help fund managers stay competitive and move forward despite resistance to change. At the center of his talk was automation and data operations for funds.

Walkup described the 4Pines strategy as “for CFOs by CFOs.” That means when it comes to automating subscription documents, anti-money laundering compliance and client identity verification, 4Pines’ staff has the credibility to promote change because they’ve walked in their clients’ shoes.

“One of the greatest things, I think, that separates us from any other fund administration service out there is that the top [members] of our firm are former CFOs of large, established private equity funds and they understand the needs and stresses that these roles have,” Gull said.

That doesn’t mean 4Pines pretends to know it all. On the contrary, like Harmonate, Gull and his team work closely with clients to understand their unique challenges and the precise solutions they need.

“For me, understanding what people who run funds are doing, knowing their pain points, it can only come through us listening and understanding what they’re going through and then trying to fill the gap between what they’re going through and what we can offer,” he said. “We try to tailor our offerings to that C-suite level COO or CEO or emerging managers.”

Reluctance to change can come from past experience. Implementing large-scale data systems can be costly, labor intensive and, when implemented badly, demonstrate with little value compared to how they were sold to clients

The key is customization. Like Harmonate and its Conductor service, 4Pines wants to give each client as much or as little as they want. For instance, Conductor can absorb tons of information or just a little. It then captures and classifies that data, learning about what it’s looking at and then indexing that data so that fund administrators can analyze it in many different ways. Conductor can also flag anything it doesn’t recognize so that the bad information doesn’t get sucked in with the good.

Similarly, 4Pines offers a web-based tool that will walk users through the subscription process with the aid of pop-up modules depending on the type of investor being served. This process captures the data from the get-go rather than wet-signing documents, scanning them and emailing pdfs around the company. It’s a security and efficiency issue.

Convincing fund managers to change can be hard. But Gull uses the analogy of the carpenter with the power drill in his tool belt to show why they need to make the jump. “He keeps wanting to go back and use a screwdriver just because that’s what he’s done for so long,” he said. “But how efficient is that?”

Click here to watch the full webcast recording with 4Pines Fund Services CRO Michael Gull.