In this paper, we consider the above factors, how they are influencing the new middle office and attempt to answer the following questions: Suboptimal and potentially dangerous data practices, Data is the lifeblood of all investment management firms. For asset managers looking to further leverage their partnerships with their service providers, or for those that do not want to invest in a data management programme, service providers are offering DaaS to their clients with access to the full suite of data management functions. The asset manager helps define the data that will be supported and the processes for how that data will be distributed to downstream applications. insurance services, corporate retirement plans, asset management. Our data experts can help you assess your operating model and guide you toward a data-centric future state that will evolve with your investment strategy. 1 “Evolving in the New Operational Frontier,” SEI, December 2014. In terms of portfolio management, the front offices of asset managers BlackRock and Bridgewater Associates, for example, are trending towards use of cognitive algorithms for predictive analysis of unstructured data to inform investment strategy. a client can manage data storage components of the data management platform on its own, but outsource integration and support to a third party, or vice versa. Hindsight should be 20/20 but without the right tools and processes in place for performance measurement, youâre wasting valuable data. This goes beyond optical character recognition, to the next set of applications that can process and analyse large amounts of unstructured data and produce predictive results. Even if there were a single middle-office system, a firm probably wouldn’t want it. However, DaaS, as delivered by service providers, offer a one-stop shop for asset managers who may pick and choose components to add onto their current in-house platform. As lines blur between your front, middle, and back office, integrated data, accurate accounting, and efficient workflows are more important than ever. While the front and back offices of asset management firms receive the lionâs share of attention and investments, the middle office is often left to fall into rack and ruin. Data store or data warehouse – a centralised data repository, Data governance – to ensure data quality through real-time oversight, Data services – Application Processing Interface (API) layer for exposing data from the data store or data warehouse and making it consumable by an ingesting application; a good data services layer also allows data usage to be monitored, Data visualisation – Make the data sourced from the data store digestible by multiple end users in a way specifically relevant to them, Technology stack – extensible architecture that allows you to make changes as your platform. The traditional application- based operational model forced reporting tools to link data sets from different sources and applications together, which often led to slow running reports with complex logic. Oaks, PA 19456 USA Alternatively, While the front and back offices are important users of, and/or contributors to data, the guardian of the organisation’s biggest asset lies squarely in the middle office. Risk analysts and managers work closely with front office teams to feed them their results relating to various asset classes and financial markets. Pervasive use of OTC derivatives, bank loans and illiquid fixed income instruments in institutional portfolios makes it incumbent on firms to maintain accurate and up-to-date analytics and valuations. One problem for firms is that implementing a true data management platform can be an expensive and risky undertaking. Centralised data management does not benefit only the middle office. In investment banking, the middle office usually consists of risk management, research and compliance departments, as well as some elements of technology. For many asset management firms, the cost of operational staff and overhead made up a significant portion of their operating budgets. Weâll help you design and implement the systems architecture designed to capture intraday positions across asset classes with a golden copy record of your data. If your firm is weighed down by legacy systems, processes, and behaviors, your operating model wonât have the strength to match evolving client demands or capitalize on innovative investment strategies. It has now become commonplace for asset management companies to include specific questions regarding middle office capabilities in requests for proposals when selecting a provider for delegated activities. The reality, though, is that many firms continue to rely on traditional operating models where reporting and analysis are based on front- or back-office systems. Excessive time to run reports or extract data from the application Asset managers are looking for competitive advantages wherever possible, and it is in this context that the new middle office is stepping out from the shadows to assume the role of guardian of a firm’s most valuable asset: data. The new middle office will support the demands of increased regulatory reporting, facilitate greater demand for investor transparency, insight into front-office strategies through advanced data quality, availability, and predictive analytics. 3 “Middle Office: A hidden source of competitive advantage,” SEI, May 2016. © MK Asset Management, LLC. You need a robust collateral management solution to reduce counterparty risk and empower your front office with accurate investment data. Morgan McKinley. During this period the term middle office was used to refer to those employees working in financial institutions whose primary role was to calculate the profits and losses realised after trading. By providing the reporting and visualisation toolkits that business users are already employing, the new middle office offers a solution in an enterprise-supported secure framework that ensures consistency and governance of the end results. The Middle Office team consists of Fund Operations and Data Management Reporting team. Discuss the revaluation of bank assets and liabilities, including â¦ The middle office is theoretically the guardian of a firm’s important data and is where much of its potential value is harnessed. Middle office. The service provider enterprise data management solution. Countries used these two metals when trading with other nations. Implementing the new middle office can be challenging, but the improved tools, insight and productivity that accompany it bring tangible benefits, including greater operational efficiency, improved transparency, and reduced business and investment risk. Given these aggravations, it comes as no surprise that business users often resort to maintaining their own separate data stores. If your team is running on an outdated investment accounting system, youâre putting your operations at risk. The data management platform provides one-stop shopping and supports all reporting needs, using the manager’s preferred reporting/data visualisation tool. With our middle office automation solutions, we provide middle office transformation for asset management firms by delivering effective customer management ... Domain expertise in middle office functions such as risk management, compliance etc. While consensus is building that the middle office is largely an untapped source of value, it’s often viewed as a cost centre supporting mundane, ancillary activities, sandwiched between its more important counterparts.2. To generate the most value from data, the new middle office transforms structured and unstructured data from a variety of sources into valuable information and actionable knowledge. While the traditional middle office may be described as mundane, its next evolution is anything but. The middle office also needs to make sure all users and potential users of the data understand the current state and the future road map of the data. The range of data available, and the frequency of update and maintenance, is configurable. Business users are understandably frustrated. Select format US/UK. Additionally, this move also gives the manager more flexibility to select which systems they use. The reporting and data visualisation tools need to call and present the data. Asset Management, Gwm-middle Office Manager Resume Examples & Samples Staff management with project and problem analysis, effective communication with management onsite and in other locations Represent the team(s) at various senior forums, locally and internationally At Empaxis, we understand the challenges businesses face reconciling portfolios â and weâre here to do the heavy lifting for you. Whether you need a system for insurance accounting or a service provider for fund accounting, our experts can guide you through the transformation process from start to finish. You need to assess the people, processes, and technology that underpin your client communications operating model to meet new client experience and reporting needs. We assess the technology and operations impact of evolving regulation so you can rest easy that youâll have the right tools to achieve in compliance at every point of the order lifecycle. Relying on business users to maintain stand-alone spreadsheets and databases makes a bad problem worse, and can be detrimental to the health of an organisation. Donât let new policies and requirements impact your investment strategy or put you at risk for fines and sanctions. Rather, data sourced from each of the asset manager’s vendors is cleansed and categorised by the data management platform provider. If we consider the aforementioned model, the possibility of providing DaaS becomes very real. IDC has estimated that such unstructured content already accounts for an astounding 90 per cent of all digital data, much of which is held across a variety of different data stores, in different locations and in varying formats.4 The data management platform of the new middle office will be designed to support unstructured data. Creating an abstract data layer, essentially a general data set built to be leveraged rather than for a specific-use case, allows firms to move reporting functions from underlying systems to the data management platform layer. To develop an efficient post-execution trade process that will grow with your firm, you need an in-depth understanding of trade processing technology, workflows, and services. Questionable data quality/accuracy from the organisation’s core applications The time frame within which benefits are realised is generally dependent on the complexity of data, the volume of data, the number of source systems, and the number of downstream applications that need to consume the data. Our continued investments in people, processes and technology are enabling us to reshape our clientsâ futures, allowing you to move with confidence, raise expectations and outpace change. Serving as the key conduit between operations and investments, the new middle office represents the future of asset management where cutting-edge technologies enable the things that have always mattered the most: optimising the client experience, cultivating relationships, delivering optimal risk- adjusted returns, and running a successful business. The related analysis conducted by asset managers generates large amounts of unstructured data, (eg, documents, PDFs, graphs, etc. Keeping up with evolving client demand is critical to business growth, but legacy IT and operations are holding you back. Mitigate risk by taking control of collateral management. SWIB undertook one of the industryâs most ambitious business transformation projectsâshifting its operations to a new model and taking its technology stack to the leading edge. An enterprise risk team will use elements of the risk systems implemented for front-office risk attribution and analysis. The data management platform, as supported by the new middle office, presents all of the data needed by the enterprise in one place. Consider how reimagining the investment management support model and marrying data strategy to digital capabilities can affect middle office functions such as: Many clients have been hesitant to adopt cloud-based tools over security concerns. System evaluation, selection and procurement are a significant undertaking. The portfolio performance team likely will use elements of the performance measurement and attribution systems purchased primarily for portfolio managers. The front office can use a data management platform to visualise data in ways not supported by traditional front-office applications. The new middle office recognises this issue and presents an environment that allows the business user access to the data they need from a governed, supported environment. The most common example is business users running readily downloadable Business Intelligence (BI) tools, such as Tableau or QlikView, against their personally maintained Excel spreadsheets or SQL Server databases and analytical tools. Gold and silver were the standard measure of the global monetary system. Power an innovative investment strategy by transforming your middle office technology and operations. This is easier said than done. To alleviate the need for clients to develop and implement their own data management platforms, some service providers are now making their own data management platforms available for their clients to use. The provision of value by service providers. To complete the picture, service providers can provide standard, client-configurable data visualisation and reporting packages that sit on top of an asset manager’s proprietary data store/warehouse. In its most simple form, DaaS employs cloud-based data storage. The data management platform required for the new middle office can be provided as an extension of the suite of options provided by service providers. You need flexible and function-rich accounting systems to handle sophisticated investments and meet evolving regulatory demands. This can extend to users relying on their own data visualisation and reporting tools to create their own presentation layer. Ensure the matching of trades against the broker using reconciliation tools; Report breaks and follow up with brokers; Ensure the settlement of transactions in custody; Monitor the back office operations (fees, corporate actions, variation margins, etc.) Asset managers will be able to take the standard service provider report set and customise this to satisfy their unique requirements without extensive development efforts. There are nevertheless several additional benefits that are worth highlighting. While IT departments can support the technology, it’s also necessary to define ownership for the daily governance and stewardship of the organisation’s data. In response to these challenges, we are seeing a trend towards Data as a Service (DaaS) offerings from service providers. Investment management firms face unprecedented challenges, including the exponential growth of data volumes, diminishing opportunities to generate alpha, and a looming arms race in artificial intelligence and machine learning. In any of the scenarios listed above, the asset manager should always retain ownership of their data. The middle office often shares usage of core systems designed for the front and back offices, with supporting, function-specific applications as required. A centralised data management platform, however, generates reports from a central data store or a “single version of the truth.” Thus, over time, the asset manager can achieve consistent, reliable, trusted reporting across the organisation. Team is running on an outdated investment accounting system, youâre putting operations. Range of data governance is harnessed conducted by asset managers ’ use of investments. 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