As Global Head of Platforms and Operations in the Asset Management business of the Danske Bank Wealth Management division, my main focus is to continuously offer our customers new innovative and robust solutions, while ensuring they and the bank stay compliant with current legislation. While bringing forward new solutions, we must ensure to make the financial markets accessible to all investors on a robust, structured, and scalable foundation. Succeeding with these endeavors takes motivated employees and collaboration – internally between and within our teams, and externally with our customers, partners, vendors, and peers. Without motivated employees and true and open-minded cross-collaboration, we will not succeed with continually innovating the relevant solutions that will help society, customers, and us meet the challenges of today and tomorrow.
Understanding the value of data and how to apply it
The biggest challenge facing the asset management industry is data: the increasing volumes of data, the cost of managing data, and, perhaps most of all, the ability to utilize that data in an efficient and meaningful way. To enable data value, you need to enable the data to travel up- and downstream through your organization’s value chain at high speed and in a precise, consistent, and transparent way.
Asset management operations is not only about calculating and delivering an IBOR. Asset management operations is about ensuring and delivering the right data consistently by help of robust and lean processing, from the beginning of the value chain and all the way through it. This means reapplying the same data consistently across the value chain although for different purposes.
Disparate systems hinder data value creation
Customers expect full data consistency and transparency in the solutions we offer – as they need it in real-time. Without seamless processing in all parts of the value chain that will not happen. Hence, we have to make data travel with STP and consistently across systems and processes, and we need to refine it and report on it in terms of performance and AUM at any time and in terms of any customer.
Lack of data discipline, disintegrated systems, and operational platforms, as well as legacy technology form a challenge to many players of in the asset management community. Some have chosen best-of-breed platforms, which has proved not to be a viable solution. For many, this has led to endless amounts of reconciliations and oversight; calling for increased investments in administration rather than investment capabilities.
Simplifying operational platforms and models creates higher value
The asset management industry will be looking for more simple platforms and operating models with increased straight through processing and a lower cost to serve. Asset management firms will increasingly distinguish between allocating resources to invest in activities that that are core and those that are not, pointing investments in the direction of processes that are core to the respective asset manager’s business model. Increasingly, asset managers will look for partnerships that deliver strong value propositions at reduced operating cost.
Asset managers will be likely to look for solid Data Warehouse solutions with full data integration into their front-to-back platform, in order to enable more STP and less need for reconciliation and oversight.
Getting up to speed with modern technology while staying compliant
The asset management industry has been a laggard with regard to adapting to modern and efficient technology and processes and applying it across its stakeholder universe. As a result, the cost to serve is too high. These years, operations is all about optimization and ensuring new data management capabilities in support of a more robust and scalable business, while providing for compliance with the extensive new regulation that has been introduced following the financial crisis. The overall focus will be on data and data processing at high speed.
Globally, we see asset managers buying operational capabilities from service providers, who apply new technologies for selected processes, e.g. machine learning for handling unstructured data. However, leveraging these services is only possible if you are fully in control of your data. This trend has not yet fully settled in Scandinavia, but is likely to do so as and when the community succeeds in modernizing data management processes and systems. At that point, partnerships on on a variety of activities may very well end up being the preferred choice, in order to allow asset managers to focus on their core investment management capabilities.
Collaborating to find the innovative solutions of the future
Building new innovative solutions and offerings for the good of our customers and the bank take motivated employees and collaboration – within and between teams internally, and with external partners, peers and vendors. In a global world with ever increasing amounts of data, the need for standardization, transparency, and agreed best practices is more acute than ever. Asset managers need to collaborate in communities to innovate solutions for problems that would not otherwise be solved. We need to share experiences to provide the best possible foundation for creating the solutions that will enable us to tackle data and compliance challenges. I believe we will see more open collaboration between industry players to the benefit of societies, firms and customers alike.
Who will be the successful companies of tomorrow?
Success depends on who is measuring. Our success builds on the trust that our society, customers, and employees show us. At any time, we have to act in the interest of society and customers and employees, delivering value at the right risk, at the right cost, at the right time. It is not only about financial growth. These days it is very much about other things such as ESG or in broader sense sustainability, which requires us to think about data, data models, and operating in new ways across the value chain. Success will be for those that succeed and excel in building sustainable operating models that will be ready to provide relevant solutions for these new trends at the right risk and price.