Russell J. Newman, CIPM, director-head of operations and IT at Rothschild & Co Asset Management US, focuses on key aspects of a digital transformation.
Russell J. Newman, CIPM, director-head of operations and IT at Rothschild & Co Asset Management US
(Securities firms are forging ahead with their digital transformations despite the pandemic-induced lockdowns, and they are finding that an IT infrastructure is much like an engine, says Russell J. Newman, CIPM, director-head of operations and information technology at Rothschild & Co Asset Management US Inc. The firm is a global and family-controlled independent financial advisory groups that offers M&A, strategy and financing advice, and investment and wealth management solutions to large institutions, families, individuals, and governments. At Rothschild & Co, Newman oversees strategic implementation and oversight of the operations including trade support, portfolio accounting, reconciliation, performance, and IT. Newman is a panelist for the SecOps session “Digital Transformation on Steroids,” slated for November 19. He took time out from his full schedule to answer questions from FTF News.)
Q: How has the pandemic-induced lockdown impacted the pace of digital transformation at most securities firms?
A: All SEC-registered firms are required to have a robust business continuity plan (BCP) that ensures the business runs smoothly and is tested each year. I think for most firms the pandemic either was a smooth transition or one that exposed a lot of gaps within the business’s BCP plan. For those that had a relatively smooth transition, I think firms were able to operate business as usual. Those that struggled had to revisit their operating model — they needed to look at outsourcing, data integrity, upgrading systems, and better connectivity. Additionally, firms that do outsource needed to ensure that their vendors were operating efficiently. I know from our perspective we sent out multiple questionnaires regarding how our vendors were operating with COVID-19, the pandemic, working from home, cybersecurity, and so on. Our vendors were extremely responsive and fully transparent. This gives us confidence that we chose the right outsourcing partners that will enable us to carry out our business as if we were in the office, business as usual with minimal disruption.
Q: Many firms are still dealing with manual systems for key sections of their securities transaction processes. Do you think the lockdown is motivating firms to truly start replacing manual systems?
A: I think firms are looking to automate processes where applicable, upgrade technology where appropriate, and outsource for scalability. I think the lockdown has made firms reconsider their costs associated with infrastructure as I believe the infrastructure is like the engine, it makes everything run. Without it, no matter how good performance is, the business cannot survive. These costs will make the firm more robust, redundant with respect to process, scalability, and business continuity.
Q: How would a comprehensive digital transformation impact the performance measurement systems and related client-reporting responsibilities of most firms?
A: Automation and exception-based reporting, in my opinion, are key to ensuring that both performance and client-reporting get done in an efficient manner and delivered to the clients as promised. Being able to deliver to clients in a shorter period after a reporting period will give clients the ability to make decisions faster on their asset allocations, and to feel confident that the firm not only has their processes down, but are able to explain their performance in a concise manner.
