Six Questions Executives in Fund Services Are Asking Themselves Right Now

We think the term “New Fund Administration” is what lies on the other side of the digital revolution that is now transforming data operations for funds. The best firms are embracing better technology that gives them faster and more comprehensive turnaround of investor information both for the client-side as well as reporting and internal analysis that is becoming increasingly crucial to success.

Getting there takes less work that one imagines, if you start with the right questions. Executives in fund services should ask themselves these six questions to test whether they are ready for the near future.

Question One – Do you see yourself on a growth trajectory? The answer can be a reckoning for some executives. Either you foresee growth or not. In the former case, you must explain your vision, which must in turn align with facts. In the latter, reassess everything because a change in direction is probably necessary.

Question Two – Where do you think fees and margins are headed in your industry? Will they come back? If the answer here was “yes,” then you’ll need to think again. Competition in the financial sector has driven down fees and margins throughout the industry. They are not coming back. Again, one can milk them while they flow or opt to find a new model that succeeds.

Question Three – How are you solving for the new normal? Cutting costs, eliminating redundancies, finding efficiencies and other measures spring to mind as common responses. But what margin might you acquire if you had better fund administrators? What new features involving more advanced data operations could you offer to customers to maintain fees?

Question Four – How are you striking a balance between the cost of people, and what role technology can play in protecting margins and allowing scale? Your team has the all-important domain expertise. It’s time to assess whether that team could be redeployed, however, while someone else took care of some data operations. A New Fund Administrator would pick up that burden, allowing for a redistribution of resources.

Question Five – What steps are you taking on the technology front, and are they meeting your needs? You don’t know what you don’t know. So maybe you have no clue about the solutions, the speed and efficiency that New Fund Administration can bring to fund services. Take steps to learn in order to see what’s going to dominate fund services in the coming years. And when you feel as if technology is meeting your needs, be open to assessing because things move fast in technology.

Question Six – How much thinking have you done on data operations for funds? The problem might be collating statements, reporting and similar routine matters. The solution is data operations that can cut down the time of those tasks from days to hours, hours to minutes. Data operations for funds is not the first answer to a challenge. It’s the tool that helps make the solution crystal clear.