A strategic alliance with the fintech firm Kurtosys looks set to deliver substantial benefits, Fundsquare’s senior business and relationship development manager, Namir Yeroham, tells Funds Europe.
On the one hand industry margins are declining, on the other hand regulatory pressure and operational costs have significantly increased over the past few years and this has only been exacerbated over the past eight months as the pandemic rages on. Data has become a crucial tool to enhance distribution services but investing in the management and technology is both costly and time-consuming. Luxembourg-based financial institution Fundsquare and fintech company Kurtosys have struck a strategic alliance to facilitate the cumbersome processes from dissemination to publication, enabling clients to focus on their core competencies.
According to Namir Yeroham, Senior Business & Relationship Development Manager at Fundsquare, both companies, who knew each other for years, were in the market looking for a partner with a complementary product offering. “We needed time to get to know each other and understand how we could help our clients optimise their data management in the most beneficial way,” he adds.
Each company brings their own skillset and expertise to the table. Kurtosys has a secure cloud platform that meets the exacting infosec requirements – confidentiality, integrity and availability of data in its multiple formats – of the asset management industry. The platform is easily integrated with documented APIs to facilitate connectivity to third parties and has an internal Product Book of Record (PBOR) along with other modules that facilitate the easy creation of funds websites, portals, and client collateral, such as pitchbooks and client reports. Fundsquare, on the other hand, has a dissemination platform with 30 people dedicated full-time to data collection. It has strong connections with all fund administrators and document factories across Europe.
Put them together and clients get the best of both worlds in the regtech space. As Patrick McKenna, Global Head of Sales for Kurtosys (pictured below), notes, clients will benefit from two experienced firms with proven technology stacks. “Together we can help clients streamline the process and address challenges within their distribution teams whether to launch a new funds website, to better automate their sales materials, or to create an ESG (environmental, social and governance) reporting portal for their institutional clients. It gives them much better control of their data, not just internally but also externally.”
The result is an improved investor experience as well as much lower operational and IT running costs. Not only are overall expenses across the distribution team whittled down, but regulatory compliance for disclosure of information is increased. Moreover, the solution provides end-to-end transparency and control over data life cycle plus time to market for product launches is shortened. It is also estimated that asset managers will save around two months for onboarding.
Equally as important, asset managers do not have to spend time and money searching for providers who can fill the different gaps and components of managing their data and integration. Although unsurprisingly, client requirements will vary depending on their respective functions and departments, there are common obstacles.
To avoid compliance breach, asset managers must ensure that the authorized products only are distributed in accordance with investors’ own characteristics of domicile and classification (retail/institutional). They also need to regularly maintain their website with a multitude of data emanating from multiple sources. It is also important that they have all the requisite information within their organisation as well as outside their proverbial four walls from legal advisers in each country for the running of the onboarding process.
Data quality is, of course, a high priority for all firms, especially in the constantly changing regulatory landscape. Websites needed to be continually updated, but it is also key that the data is consistent not just across their website, but also across the print materials, and other public venues to investors and distribution partners.
No room for error
Given the sheer magnitude of data required to feed a website, it is more efficient to have a completely round-the-clock automated process that cuts the margin error to zero, minimising any compliance breach.
The partnership addresses all these challenges with a one-stop solution which combines Kurtosys’ platform – which offers a full service from website to client reporting and everything inbetween – and Fundsquare’s deep well knowledge of primary different data sources, including static, net asset value, dividends and legal documentation for all Luxembourg funds.
Manual processes are significantly reduced, allowing asset managers to better redeploy their resources on value-added products and services. Kurtosys’ digital platform, with its cutting-edge fund-buying and investor support, along with Fundsquare’s expertise in gathering, integrating, verifying and normalising data from a multitude of sources, offers a more automated and efficient approach.
In addition, Kurtosys’ ability to leverage a single source of data across multiple outputs – factsheets, presentations, digital fund and data experiences – with Fundsquare’s regular regulatory updates safeguards that there is no or little disruption.
Both companies are also well versed in maintaining the highest data quality by catering to local requirements. Kurtosys can adapt content for specific markets and regulatory regimes, while Fundsquare has robust data-quality controls and rules firmly in place to manage data quality during the collection phase. The blanks, such as missing NAVs or wrong data or documents not in line with naming conventions, are quickly recognised and rectified.
“The two biggest topics for our clients are data management and quality,” says Yeroham. “There are many different levels of data that clients need to handle and from a regulatory perspective, the information has to be updated regularly and verified. It is important to have an automated process with no human intervention because the data is increasing every day and clients want to make sure that the data is correct and regularly updated. The benefit of the partnership is that it saves them time, decreases the complexity and makes it into a seamless process.”
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