BNY Mellon is hoping to tap into the growing demand for middle office outsourcing with its OnCore platform, which will manage a range of activities for asset managers including securities processing, accounting and risk monitoring.
The platform is now available to asset managers in Europe, Middle East and Asia, having already rolled out in North America.
Asset managers are increasingly asking for outsourcing because they are under cost pressure and want to make their processes more efficient. According to the consultancy McKinsey, operating margins have sunk a third to 22% since 2007.
In addition, many asset managers are encumbered by legacy software platforms that prevent them launching new products quickly. BNY Mellon claims OnCore can help speed up product launches, while freeing up resources to spend on distributing and marketing funds.
Daron Pearce, head of investment manager services for EMEA and Asia-Pacific at BNY Mellon Asset Servicing, believes middle office outsourcing is such an appealing service that demand will soon exceed what asset servicers can provide.
“There is limited bandwidth in the service provider community and pretty soon there's going to be close to unlimited demand for the service we offer,” he said. “There is going to be a cut-off point.”
This means asset servicing firms will have the luxury of only working with asset managers whose businesses they trust. Pearce added that asset managers are now “more realistic” about what they will pay. In the past, many asset managers viewed outsourcing as a cheap fix, an attitude reflected in the slogan “our mess for less”.
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