Last week we had the privilege of getting together for a conference that brought together leading voices from the world of investment technology. The event, known as The Summit for Asset Management (TSAM) Technology Show, was being hosted virtually because of continued Covid restrictions, which presented both benefits and drawbacks. While it meant that more people could attend, unrestricted by their geographic location, the personal interactions that characterise these conferences were not quite the same. Zoom roundtable discussions offered a worthwhile replacement. But I am sure everyone will be looking forward to seeing their peers face-to-face when restrictions are hopefully lifted next year.
Staying with the Covid theme, the impact of the pandemic on investment management operations was a key discussion topic over the three-day event. That was hardly surprising given the severity of the circumstances. Not only have organizations been forced to test their business continuity plans in anger (and for a much longer period than anyone could have imagined), but they were also made to do so during exceptionally difficult market conditions. The market volatility caused by Covid triggered higher transaction volumes, more frequent reviews of fair value pricing and NAV calculations, as well as some difficult portfolio rebalancing decisions – all of which would have been challenging enough, without the disruption of having all staff working remotely.
But despite these challenges, the consensus has been that the industry has coped remarkably well. While everyone was forced to get accustomed to new working routines, the availability of IT services and continuity of operations held up extremely well.
This is testament to some key trends that have already been on-going, but are likely to accelerate because of the Covid pandemic:
Maintaining an agile approach
A year ago, it would have been difficult for anyone to imagine the kind of disruption to standard operating practices that Covid has caused. Yet the lesson for the future is that we may have to prepare ourselves for even greater ‘unimaginable’ situations. The ability for people, processes, and technology to adapt to changing circumstances is therefore key.
Complex operations are prone to struggle when an external shock (like Covid) requires an agile response. Most asset management firms have already been simplifying their IT operations through increased adoption of cloud services, managed services or other outsourcing relationships. These trends are only set to continue as investment firms focus on their USP (investing) and call upon technology partners to take on greater responsibility for service management.
Managing remote workers
Having all staff work remotely has been an eye opener for many organizations. Although the technologies that underpin remote working are by no means new, the pandemic has expanded peoples’ perceptions of what is possible. Some factors have made a positive impact on employee satisfaction, such as spending less time commuting and more with their families. Equally, companies potentially stand to benefit by reducing spend on facilities and being able to hire from a broader pool of talent (less constrained by geographic location). At the same time, a distributed workforce brings its own challenges, specifically around managing cyber threats and information security. This ‘new normal’ will place the spotlight on managing operational risks, specifically by reducing reliance on end user compute and managing information security by centralising operations on secure server-side (or cloud-based) infrastructure.
Looking forward to the year ahead
As 2020 comes to a close, we are looking forward to the year ahead and hope that everyone can take positives from what has undoubtedly been a very difficult year.