Automation Brings Operational Relief to Mutual Fund Industry
By Cameron Routh, CEO, Delta Data
Last week, Ignites posted a video conversation I had with Sonya Swink at the NICSA Strategic Leadership Forum back in March. At the time, I was primarily thinking about the productivity loss and high-risk asset managers and distributors create by failing to automate back-office tasks. As an example, the idea of managing millions of dollars of fees or revenues with a massive spreadsheet is incomprehensible to me.
Fast forward five months. It’s been a difficult year for asset managers. Seemingly every day brings another story of an asset manager that is cutting staff, pausing hiring, or announcing a comprehensive cost reduction plan. To flourish, firms will need to do more with fewer resources. Automation is a smart solution to counter tasks that would otherwise be performed by valuable staff. By increasing efficiency and decreasing turnaround time, automation enables firms to redirect resources to other value-add areas of the operation.
Automation Aversion
We are creatures of habit. We often perform manual tasks simply because we don’t know automated alternatives exist, or because we don’t recognize the long-term value of a short-term investment. By deferring to habit, though, firms offer themselves up to fall victim to inevitable human error that accompanies manual processes and inadvertently expose themselves to unnecessary risk and consequence of failure to comply with evolving regulations.
Of those entities that have yet to embrace all that these efficient automated solutions have to offer, many cite cost as the main barrier to adoption, wherein new technology is believed to be too expensive. But a disciplined approach to expense growth is to ensure adequate investment in critical, high-impact areas. Few are more critical and higher in impact than the technology area.
The cost of doing nothing is significant. By delaying investment in this technology, organizations will face additional high, hidden costs related to labor and productivity. Similarly, consuming critical technology resources to build a non-core internal solution is not a prudent allocation of finite resources when excellent solutions already exist in the marketplace.
Operational Relief
Fortunately for the pooled asset industry, both manufacturers and distributors, there are excellent back-office automation solutions that will de-risk critical tasks and show significant ROI over the long term. With automated solutions, firms minimize unintended exposure to unnecessary risk, while allowing for improved efficiency of time and resources.
These solutions offer firms more operational scalability with straight-through processing, automation, and effective data management that allows operations teams to handle their data more efficiently and reallocate resources to more strategically important projects.
Third-party, off-the-shelf solutions provide firms with the benefits of scalability at a fraction of the cost of doing it internally, as well as faster time to implement. In turn, automating at scale can have a significant impact on operational costs, which can ultimately free up cash flow for higher-value investments.
Industrywide, operating models have been strained or challenged with a renewed focus on efficiency. Automated prioritization solutions direct a firm’s resources to where they can be most efficiently utilized, allowing firms to better adapt these evolving operational models.
Contact us to learn more about how automated solutions can benefit your firm’s operation.