“The Great Resignation” is the préoccuper de jour for the financial industry and one of the leading conversations at this year’s NICSA Strategic Leadership Summit. Industry observations take on real meaning when they migrate from the media and land on a company’s doorstep.
Recently, a fund company contacted Delta Data with a hurried request to look at one of our products: Fee Manager, a tool for automating intermediary fee processing. The one person that had been managing fee processing decided to join the Great Resignation, with no advance warning, and left them in a bind. While other parties close to the operation knew the kinds of deals that were being managed, no one felt comfortable enough to assume the risk of day-to-day fee management. The knowledge had walked out the door, driving the decision to pull human error out of the equation. Chaos drove innovation.
Our example is far from unique. Many firms are dependent on a handful of personnel, sometimes as few as one or two, who hold a large amount of institutional knowledge required to process hundreds of fees from their dealer networks. Think about complex fee agreements and the difficulty of fully modeling into Excel. Many additional steps, dependent on a few individuals, are required outside of calculations in a manual environment. The “human touch” is necessary to:
- Transform data into a spreadsheet with macros
- Merge TA and Sub-TA data alongside the data provided in the invoice
- Align time periods in a data series
- Manually manage includes and excludes in invoice processing
The standard industry practice of leveraging personnel for fee management in lieu of technology may now be taking a greater toll than in the past, which is ironic, because technology has been the clear choice for other capex expenses, including real estate and HR.
In a sense this “Great Resignation” is reminiscent of the famous Howard Jones’ song, “No one is to blame.” After years and rounds of organizational lean out, burdens placed on ever dwindling
staffs have increased. Some small teams touch upwards of 100 or more invoices a month. What does this process look like, you ask? Here’s a day in the life (Beatles song):
Step one: (we start out easy) Receipt of email, categorization, saving the attachment to the correct file location and checking against a spreadsheet of fees to determine which firms to follow up for the missing data.
Step two: (Allegedly) integrate sub account data from different dealers into the spreadsheet alongside their TA data, then run macros that represent reasonability tests. The ones that fail are saved off in another folder for an analyst to research further.
Step three: After all the preparation, data integration, verification and communication, this lucky individual runs an additional set of macros to process payment allocations and manually communicate with Finance to apply these to the GL in a different, specific format.
Could you realistically blame anyone tasked with this job for wanting to leave? There are options that remediate this risk, and Delta Data developed them over eight years ago.