Portfolio managers face an issue of prevalence of the legacy systems. For the last few years, investment advisors and consultants have been utilizing technology from spreadsheets to complicated customized systems. In fact, the industry has experienced immense growth and even enormous complexity.
Some of the challenges to face include varying accounting standards, increased security and regulation issues, short settlement cycles, and round-the-clock trading. Technology appears to change on a daily basis. Cheap, efficient, and smart norms are to be expected. In fact, they may not be an exception.
In this era, data analytics, legacy systems, and business intelligence is likely to represent a lot of risk to your enterprise. Day-to-day operations need the ability to distribute, manage the process, and even report accurate financial data. Remaining behind should never be an option. The following are some signs, which can reveal whether you have got a decaying system and the way it should operate.
Signs of poor financial portfolio system
Difficulties in managing data
It is quite difficult to maintain data in various systems. Moreover, it can be quite complicated to move data from a given system to another. Can you identify the data? Is it complete, reconciled, and accurate among various systems? If the answer is NO, then you need to re-evaluate the platform.
It is important to note that investors expect to report to be concise, clear, and customized to meet their needs. This is necessary for institutional investors. If a business can meet such expectations, then it will have a great competitive advantage. However, if your reporting does not deliver the level expected by your clients, then you run the risk of being left behind. Remember that the client expectations are not just limited to the content and form of reporting.
Difficult in integrating disparate systems
Doing real integration is not just connecting systems. The systems must communicate to each other without any problems. The process of moving data manually from a given system to another will affect efficiency. This will increase the risk of errors.
Escalating compliance and legal costs
Asset managers face the challenge of complying with future and current regulatory requirements. You should note that the complex regulations make reporting systems become a liability rather than being an asset. Moreover, aggregating data from various systems for reporting is not only resource-consuming but also very risky.