Why is the investment management digital experience falling short?

By Tom Dillane Director of Product Integration
November 12th 2021

Seamless digital experiences have become such a part of our daily lives that we almost take them for granted. And this makes an unsatisfactory experience grate all the more – something way too common in today’s investment management world.

What’s the problem?

There’s certainly no dearth of digital portal solutions on the market. And they are such a central feature of today’s investment management value proposition that no vendor can hope to survive without one.

Yet, actual user take-up remains low. Often that’s because the digital offering falls short of expectations, with the technology lacking the specific functionality different user groups want to see. A pretty front end without the proper service support won’t cut it.

What users want
Key to creating rich digital experiences that add real value for users is to understand the desires and expectations of each of the different groups.

Investors – The digital experience for investors centres on empowerment. They want intuitive technology that allows them to make decisions, interact with their investment manager, examine research and offer documents, and view real-time information on demand. Self-servicing capabilities – from account opening to placing orders, reviewing contract notes and accessing user-defined reports – are increasingly important.

Investment managers – An integrated, digitalised environment offers investment managers unprecedented transparency and real-time insight into their marketing, fundraising and client servicing processes.

It allows them to see whether prospects have opened a subscription form, if they’ve completed it, whether supporting KYC documents have been submitted, who the ultimate beneficial owners are and how much money the prospect is committing. So armed, the investment manager can determine how to nudge prospects towards sign-up, address any AML/KYC issues and gauge whether they need to approach other investors to meet their targets.

By capturing and analysing data gleaned from the capital raising process and investors’ subsequent digital interactions, investment firms can also develop more accurate profiles of who their investors are and what they want. Lessons learned can help hone future capital raising activities and improve ongoing client relationships.

Fund administrators – Integrated end-to-end workflows are the big digitalisation value-add for fund administrators.  By linking the front-end portal to back-end administration systems, any data self-servicing investors enter can be captured in a consistent, formal manner. That minimises potential errors and the administrator effort involved in liaising with clients and keying in data.

Online workflows improve transparency and control. Data and documents can be controlled and approved before being sent to the investment manager and their subsequent release to investors. Any required changes can easily be taken back a step in the workflow, completed and re-sent. And tracking all communications and amendments will create a robust, transparent audit trail.

Digitalisation depends on administration
As a central party to all participants and processes, fund administrators have a pivotal role in delivering the sort of comprehensive digital experience investment managers and their end investors are coming to expect.

Administrators control and maintain much of the necessary data – from processing orders to pricing securities, calculating the NAV and preparing reports. Provided the front and back ends are properly integrated, data can flow across the investment management chain, from administrator to investment manager to investor and back again, to create that multi-faceted digital experience industry participants want.

In theory. In practice, it is no simple task – as many in the industry have found. Administrators and their software providers will have to work closely together to solve these challenges. Those that succeed will indeed gain a valuable competitive edge.

Read More on NTAS

About Deep Pool

Deep Pool is the #1 investor servicing and compliance solutions supplier, providing cutting-edge software and consulting services to the world’s leading fund administrators and asset managers. Our flexible solution suite, developed by an experienced team of accountants, business analysts and software engineers, supports offshore and onshore hedge funds, partnerships, private equity vehicles, retail funds and regulated financial firms. Deep Pool is headquartered in Dublin, Ireland, with offices in the United States, the Cayman Islands and Slovakia. For more information, visit www.deep-pool.com.

 

Tom Dillane
Tom has set up the data office at a fund admin which enabled data-based decision making at an exec level across all pillars from revenue to cost, marketing, resourcing, & product. He built out an analytics department in parallel to embed a scalable function for best-in-class product & application management.