Deep Pool Financial Solutions’ Roger Woolman explains how fund managers and administrators are increasingly using digital investment services to keep pace with evolving investor demands.
The investment management world arrived late to the digital party. But a sophisticated digital experience has now become integral to today’s asset management value propositions, not only for retail funds but also alternatives funds, such as private equity and hedge funds.
While demand for digitalisation is growing, delivery of solutions tends to fall short of expectations. Amid an array of digital portal solutions on the market, take-up by fund managers has remained low. This is partly due to the lack of specific functionality for each user group – but this is an issue we are determined to solve.
New age of investing
In our everyday lives, everyone has become used to the self-service model in retail banking, using websites, apps and even social media channels to get financial information and interact with providers. Having enjoyed these benefits, it is natural for investors to expect the same level of service from their investment managers.
Investors now want to review and control all their holdings in both traditional and, increasingly, alternative investments on mobile devices. They want to engage with service providers and make transactions on dedicated apps. Such digital offerings need to offer users both an attractive, intuitive front end as well as broad functionality, a holistic view of their positions, trading capability, communications and real-time data.
However, different types of investment management entities have operated at different levels of sophistication for the digital experience. It is still common practice in the alternative space for managers to rely on PDFs, faxes, and emails to communicate important information. Ultimately, managers must deliver information in the format that their clients demand.
However, we are increasingly seeing investors push their managers to adopt the self-service model – so they need to respond to ensure they remain competitive. It is not possible to deliver this functionality without software linking together disparate sources of information.
Investors want to use intuitive technology to interact with their investment manager and gain access to real-time information; rather than waiting for statements, they want it all on their schedule.
Many of our clients are increasingly rethinking the digital experience they provide to their clients, the managers and their investors – that is one of the main reasons they turn to us.
While investment apps appear simple on the surface, they require substantial infrastructure behind the scenes to deliver the desired seamless real-time functionality. Therefore, it is important to consider the digital infrastructure as a whole, from the mobile app to how it connects with the rest of the ecosystem that delivers the market and back-office data.
Digitalisation can provide managers with access to real-time information, enhanced efficiencies, lower costs, self-service options, and deeper insights into capital-raising processes and liquidity demands. It can provide many opportunities to participants across the investment management chain, but this involves overcoming challenges as well as putting in work and investment.
For example, for a hedge fund, there may be digital onboarding interaction, such as anti-money laundering (AML) and know your customer (KYC) requirements, before the investment lifecycle starts. Then, once the investing lifecycle has begun, online trading, communications and reporting will continue. Updating all of this in real time can be a substantial challenge for many fund managers and administration companies.
Data cleansing and normalisation is also essential to creating a simplified data model. Managers have databases spanning a multitude of information, from capital raising and onboarding to deployment, trading and compliance. To compound the problem, many corporations are spread across several locations. Therefore, a unified, single source of data is essential, regardless of the operation in hand, across investor data, accounting data and compliance data.
The digital investment management experience falls down wherever there are disconnected systems. Constant connectivity is essential for delivering seamless, end-to-end data flows.
At Deep Pool Financial Solutions, we simplify our clients’ operating models. We provide a digital hub that enables investors to gain easy access to their accounts, all protected by multi-factor authentication and data encryption.
Our digital offering provides investment managers with enhanced levels of transparency into their processes. Fund administrators use integrated digital processes to give their investment manager clients enhanced visibility into the order flow. Access to real-time information allows them to see the orders that have come in and how many orders have been settled. This holistic, real-time view gives managers greater control over their data and keeps them up to date with their operations, enabling them to optimise their profitability.
Collaboration between fund administrators and software providers is key to turning the opportunities of digitalisation into reality. We partner closely with administrators to help them provide intelligence to investors. Equally, it is important for us to gather intelligence from them. This is because two-way interactions enhance investor engagement, which can promote increased client satisfaction and investor stickiness.
At Deep Pool, we believe it is important to keep innovating to meet the constantly changing demands of the industry and investors. We have the expertise to ensure our fund manager and administrator clients can provide investors with an optimal digital experience.
Last year, we broadened the footprint of our investor services platform when we relaunched HWM Group as Deep Pool Financial Solutions to create the world’s premier investor servicing and regulatory solutions provider, delivering fund administration and transfer agency technology to fund managers and fund administrators.
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