The European outpost of the Aussie-owned financial services companies solution provider firm, Bravura Solutions, is seeing a sea-change in their clients’ demands as the asset management sector evolves.
Matt Pells, Product Manager, Funds Administration, explains that the firm works with four of the world’s five biggest custodian banks supporting their role as transfer agents.
“Our clients use our software to run their administration on behalf of fund managers,” he says. The firm also supports wealth managers and offers a front-end advice solution which supplies a digital platform for advisers.
Pells says: “Pre-Covid, on the transfer agency side of our business our clients were all about growing their business using a core registry that was resilient and scalable.
“Post-Covid, that focus switched from our clients who had achieved that scale and then needed to lower their costs and their risks so we were reaching out beyond the core registers, developing enabling technology and orchestration – business process modelling – that would enable clients to reduce their costs.”
Here, Pells reports one client reduced their operational overhead by 60 per cent.
However, clients wanted to reduce their risks as well and the firm created a financial messaging platform, Babel, which trades over a trillion a year, designed to take out the risk and cost element of trading.
The firm found that their clients also wanted to increase the digital experience of their clients, encouraging them to self-serve more, so the firm built new tools for end users, only to find that they struggled with digital adoption, so the next step was to work with clients to raise digital adoption across their clients.
“Change takes a little while to flow through,” Pells says, diplomatically, adding: “In financial services in particular, people are used to doing things in a particular way.”
Looking forward, Pells says that the firm’s clients are seeing new technological developments with new start-ups based on distributed ledger technology (DLT) systems and blockchain and new providers claiming they can use AI.
“Our clients are sitting up straight and saying ‘we will be left behind here’ so they are coming to us to ask what we are doing in this space.
“Fund managers are saying we want new products and a quicker time to market and our clients used to come to us and say, ‘can you support money market funds or hedge funds’? Now that has swivelled, and they ask for features such as ‘can you support liquidity management or performance fees because they recognise that investors are driving new products.
“It’s not an asset management type solution that they want, but a menu of features they can pick and choose from.”
Pells predicts that as the technology advances, there will be more collaboration as there will be no one solution from one firm so partnering will be more important particularly as new asset classes, such as crypto, appear and they want to go in as quickly as possible.”
The change is driven by new and better technology. “The impact of DLT will be huge and we will move to tokenisation in our business over time, but this is a long term play for the industry as a whole so near term solutions are vital,” Pells says.
His firm is taking its core registries and breaking them out into modules so that rather than three big systems, the firm has a set of modular solutions and in that process it is also mindful of the arrival of artificial intelligence (AI) in the industry.
“AI needs data and in the right format, so we have an eye on the future examining how we prepare that data model so that when AI comes along, we know how best it can consume that data. We are thinking about the future as we move towards it step by step.”
