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The Middle Office ‘Linchpin’ to Competitive Advantage for Asset Managers

The explosive growth of data, compliance requirements and internal/external demands are huge challenges on the horizon for the Middle Office, but not without opportunities to gain significant competitive advantage, says StatPro in a recent post The Middle Office: Key Challenges That Will Shape Its Future.

 

Similarly, PWC in a recent report stated: “In our view, by failing to effectively transform the middle office into a bottom-line contributor, asset managers are likely to find themselves facing lagging margins and scarce resources at the very time that they are struggling to succeed in an increasingly competitive market.” (PWC: Transforming the asset management middle office to a bottom-line contributor)

Middle Office Challenges

Some of the key challenges COO’s and their middle office teams face, along with associated factors are:

1)  The middle office is growing in strategic importance within the asset management world

– Expanding asset volumes and range – geographical and market type

– Growing client expectations

2)  Data management volume, complexity and regulation are increasing

– AUM will rise from USD 63.9 trillion in 2014 to over USD 100 trillion by 2020 (PWC)

– Increasing and ever-evolving regulation

3)  The drive for cost efficiency isn’t dissipating

– Demand for more timely, accurate data

4)  It’s difficult to add value with existing processes and technology

– Legacy systems

– Siloed operations

– Manual processes

5)  The future toolset needs to deliver automation, intelligent workflow and computing scale.

Middle Office Operational Command & Control

Middle Office Command & Control

Middle Office ‘Indy Car Pit-Stop’ or Enterprise Operational Command & Control Dashboard along the Intelligent Investment Data Highway in the Cloud

Simply put, the middle-office operational infrastructure has grown up organically making it error prone and hard and expensive to maintain.  The most difficult aspect of transformational change outlined above, however, is rarely a new system, product, client or strategy but rather the data and how it flows.

At its core is rules-based enterprise processes and operational automation in the cloud.  IKINDI refers to it as its KTier™Middle Office Operational Command & Control  platform — a leading application and data integration platform in the cloud designed specifically for Asset Managers. Employing a flexible and component-based architecture that is grounded on nimble business rules and industry best practices, KTier™ validates, enriches, and transforms data. It operates in a distributed environment and supports high levels of scalability, availability, reliability, redundancy and durability.

You might envisage the middle office as an IndyCar ‘pit stop’ along the Investment Data Highway. The ‘pit stop’ — KTier™ — provides a competitive edge for asset managers – a secure, scalable, fast and reliable rules-based data processing and data hub forcing an Intelligent Enterprise Investment Data Highway in the cloud.

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