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Performance Teams Facing Pressure of Complexity Turn to New Technology

Risk, Performance, and Reporting

By Dean Mcintyre  |  December 13, 2017

As I discussed here previously, the performance team is under tremendous stress to keep up with the growing demands of its function. Regulatory pressures and increasingly complex reporting requirements are partially to blame for this, but the demands of digital solutions and self-service technologies have also pushed performance teams to do more with existing technology.

Technology is integral part of the performance team’s success. However, according to a survey conducted by FactSet and Coleman Parkes across 100 Heads of Performance in the U.S., Europe, and Asia, the demands of industry evolution also affect technology adoption. Performance teams frequently rely on antiquated systems, which may not talk to each other properly or support the increasing complexity of front-office needs. More than two-fifths of respondents in quantitative research positions highlighted technological updates (46%) and outdated systems (43%) as major areas of concern.

But despite the general acknowledgment that systems must be upgraded, the eye watering complexity of return and attribution history is enough to give most teams pause and can make the adoption of new performance systems feel like voluntary heart surgery. 

Bracing for Change

Certainly, there is a reluctance to write off the time and effort asset managers have invested in legacy systems, in spite of the regulatory concerns around tools such as spreadsheets and in-house systems. Concerns around integrating new systems with existing technology was cited by 42% of respondents, while 38% worried specifically about the difficulty of integrating the data and history from systems. Justifying cost was a fear among half of those surveyed, especially in conversations with senior management.

in spite of the regulatory concerns around basic tools such as spreadsheets and in-house systems

There is no doubt that change (and the resulting stress it puts on month end) makes performance measurement (and the teams that rely on it) nervous. Yet there are perils to not addressing technological constraints. For example, regulation and audits can put basic legacy systems to a breaking point.

With technology moving at light speed, concepts like data lakes and digital strategy are forcing a mindset change and a delivery focus from the performance team. However, even with the importance of capturing better performance data, investment return is still the key indicator for clients. As a result, performance teams would be remiss to stay with historical technologies if it means halting progress at the firm. While reluctance to confront the problem is understandable, it cannot be indefinite. 

Preparing to Adopt New Systems

All change must be adequately planned and executed with specific goals for the future, rather than simply following a trend or for cost’s sake. Performance teams should approach new technological deployments by asking, “What will my consumers need and how can we deliver that?" and "What is the future ecosystem of the company and this technology's place within it?" 

Change for the sole purpose of cost-cutting is unlikely to be effective in the long term.  

For more tips on successfully implementing a new performance system, download our eBook: The Performance Function Reshaped: The Teams, Technology, and Workflows of Tomorrow.

the performance function reshaped ebook

Dean Mcintyre

Vice President, Senior Director, Portfolio Management Business Development

Mr. Dean McIntyre is a Senior Director, Portfolio Management Business Development at FactSet. In this role, he is responsible for the growth, direction, and go-to-market strategy for portfolio management solutions, focused on new technology and capabilities for the portfolio manager. He has over 20 years of experience in the financial industry, primarily as an investment performance and risk practitioner but also in strategy, sales, client services, and product development. Prior, Mr. McIntyre has held senior positions with vendor and investment management companies including UBS Global Asset Management, Bloomberg, BISAM, Northern Trust, and Schroders.

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