External asset managers account for a significant proportion of managed assets in Switzerland, and in regions such as Asia, for example, they represent a massive growth market in the financial services industry. For their work they need a comprehensive array of services provided by their depot banks. As regulatory pressure grows, providing these services efficiently becomes more of a challenge.

The challenges
The services required by external asset managers from their depot banks typically include the following:

• A modern IT platform with online access
• A dedicated contact desk for direct inquiries
• Fast and reliable processes
• Flexible fee structures

The challenge for banks is therefore to offer a high level of service while harnessing efficiency potential and achieving economies of scale. Factors such as regulatory requirements (e.g. for client documentation) in particular mean also constantly adjusting existing processes.

The approach
When it comes to offering external asset managers a modern platform, many banks have some catching up to do. Read-only access, with no capability to input transaction data, is not enough to keep up with the competition. The trend is clearly toward direct access to different types of transactions on the key trading venues or broker networks with online reporting functionality. Inclusion in the bank’s core bank system is essential here to ensure efficient execution and handling and guarantee access to the entire product range.

Smaller asset managers in particular are increasingly feeling unable to satisfy growing demands on compliance, documentation, and operational risk management. Depot banks that can offer support with services and/or meet their needs have a clear competitive advantage here.

Synpulse has been able to successfully integrate external asset managers in the banking platform in several implementation projects. A high level of expertise and market knowledge have made it possible, in close collaboration with banks and asset managers, to develop best practices for business models, processes, and technological connectivity.

In the projects implemented to date, we have seen an increase in efficiency and a reduction in the banks’ operational IT costs. Even directly after hot spot reviews of the banks’ existing handling processes in this area, it is possible to identify potential savings and make concrete recommendations for action.