As cost pressures increase for asset managers, accessing the benefits of a scalable technology platform regardless of firm size, brings multiple advantages.
The cost of doing business is rising for asset managers. Regulatory pressures are driving up compliance costs. Rule changes and amendments present repeated challenges for companies as they attempt to keep up with developments.
This can be a particular issue for those asset managers operating across jurisdictions. Nuances of national and regional regulatory frameworks require companies to have multiple reporting processes, which can be a significant expense.
In addition, regulators are placing more emphasis on business resilience and firms’ ability to protect from or respond to operational issues. Cybersecurity threats must be addressed, and data must be protected while also being easily accessible to those with the permissions to use it.
Meanwhile, downward pressure on fees is eating into margins. A recent report by ratings agency Fitch warned that traditional asset managers faced margin pressure driven primarily by “fierce competition” from low-cost index-tracking products (1).
For boutique asset managers in particular, all of this means that operational efficiency will be crucial to future success. Achieving this requires companies to have front-, middle- and back-office systems that are flexible and adaptable to change, as well as secure and resilient to other challenges.
A flexible solution?
While it’s possible to develop this technology in-house, maintaining it and developing it to match the evolution of a company can be expensive. It pulls time, money and resources away from an asset manager’s core functions.
A third-party system that supports growth with configurable multi-jurisdictional functionality and supported by plug and play microservices, may be more fit for purpose.
Scalable technology-led software solutions should form a core part of asset managers’ systems. This supports cost-effective operations and future growth, all while continuing to service end clients.
The challenge that asset managers on the boutique end of the scale face is that a system with this kind of functionality is usually the preserve of much larger firms.
However, developments in digitalisation and automation have made this more accessible. Cloud-based technology can bring the benefits of scale to asset managers of all sizes by pooling them onto a shared service platform with high-end functionality. Cutting edge technology such as artificial intelligence and machine learning can automate repeatable processes, giving asset managers a speedy and resilient administration and transfer agency service.
As well as cost savings through economies of scale, such an approach can also make it easier for asset managers to grow, safe in the knowledge that their technology systems are more than capable of supporting a larger business.
Rufus SaaS: The building blocks of success
Bravura’s Rufus Software-as-a-Service (SaaS) and SaaS+ offerings are designed to give small to medium sized asset managers – typically those with less than £50 billion in assets under management – access to institutional-scale administration capabilities without the need for significant investment in internal resources.
The core platform supports all the main elements of administration and transfer agency functions, including investor servicing, anti-money laundering checks, dealing, standard product and fund wrapper support, and digital ledgers.
Rufus’s shared environment pools together asset managers to offer economies of scale and ensure that services are provided on a cost-effective basis.
The shared environment does not mean Rufus can’t be flexible to the needs of individual businesses. The core transfer agency platform offers a number of additional optional ‘modules’ to bring further functionality and benefits.
For example, Rufus Digital can plug in to the core software to allow asset managers to set up online portals for investors, advisers and distributors. Enhanced and standardised reporting across products and strategies makes providing your clients with full transparency on their investments straightforward and efficient.
Technology such as Stanza – Bravura’s virtual assistant driven by market-leading machine learning software – can help monitor and organise unstructured data and messaging, bringing further streamlining to your operations.
While the SaaS platform is aimed at smaller asset managers, it is designed with scalability in mind. As your business grows, it can help you adapt to your changing needs. Rufus SaaS+ and Rufus Enterprise offer additional support and functionality as your asset management business grows.
Speak to Bravura today about how Rufus can help your business.
For more information about Bravura and the fund administration services we offer, please get in touch.
(1) ‘Traditional Investment Managers Face Continuing Margin Pressure’, Fitch Ratings press release, 6 May 2021: https://www.fitchratings.com/research/fund-asset-managers/traditional-investment-managers-face-continuing-margin-pressure-06-05-2021