Michael F. Beck
As financial services firms work to create efficiencies in the performance measurement and client reporting teams, there are some fundamental questions that need to be addressed from an information technology (IT) management perspective.
These questions also apply to all IT systems that support other facets of securities operations.
Firms need to be sure to include internal data management, performance, and client reporting groups in the IT framework to ensure that their specific technology needs are met.
One major advantage of including those teams is to ensure that there is data harmony across multiple platforms, which will help to enhance the client experience. If these groups are not part of the entire IT decision-making process, then the client reporting process and actual reports may not be viable alternatives to what is already in use today by the firm.
Legacy systems and internally developed applications can cause major headaches for middle-office teams as far as the new asset types, new data schemas, and regulatory updates that legacy systems cannot support.
These systems can be intertwined in many facets of the organization and will require detailed analysis to ensure that the effort to update or replace adds value to the organization.
As firms look for new and innovative ways to help support the business, they need to ensure any systemwide implementation will be a long-term uplift for the firm and its employees.
Once it’s deemed that an IT system is no longer viable for the organization, a review of the IT marketplace should be initiated to ensure that the firm is reviewing all of the available technology that exists.
After a review of the available software is complete, there should be an extensive review of any potential new solutions that may be implemented.
The review should include system metrics, due diligence documentation, client references, integration with other platforms in use, and an assessment of the cultural fit of the new firm with your investment firm.
The last point about a cultural fit is often overlooked and can be very problematic during the implementation and training of staff that have to use the new platform.
If the investment firm, software vendor, and possible external consultant do not share the same view of implementation, servicing, and system roadmaps, it will lead to a substandard outcome with the software firmwide.
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The vendor selection process can have added complexities when there are other legacy or external systems that any new IT provider must interface or accept data from.
This can add another layer of complication because there will need to be customized data interfaces built to securely send data among multiple platforms. There also must be a security overview of new providers to ensure that their systems meet all of the regulations of all of the countries that your firm operates in and where client data has been stored.
If your firm is considering a software change or upgrade, putting in the effort throughout the process will pay dividends via the client reporting and performance measurement teams specifically. It will also lead to an enhanced client experience.
(The author Michael F. Beck, CAIA, CIPM, CFP, CPA (not in public practice) serves as a performance measurement vice president for Glenmede Trust Company, based in Philadelphia. Beck provides performance measurement reporting and risk metrics and helps manage Glenmede’s Global Investment Performance Standards (GIPS) compliance. He also oversees the deployment of new performance measurement software solutions for the firm. He will also be a speaker at FTF’s Performance Measurement & Client Reporting event on Feb. 29, 2024, at Etc. Venues, 601 Lexington Ave. in New York City.)
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