Technology: innovative solutions required to bridge gaps between traditional and alternative worlds
The convergence of alternative strategies and mutual fund requirements means that innovative technology solutions must be devised that can bridge the gap. Major service providers can use the strengths of their platforms, while others are developing specific applications for the ’40 Act space.
Technology is a key challenge in developing products for the alternative mutual fund space. Most full service administrators utilise core applications from industry-specific and application-specific software vendors, as well as integrating data among specialty systems.
“There are probably only three systems in the entire industry that can support mutual fund transfer agent work,” says U.S. Bancorp’s Kern. “We have developed ancillary peripheral technology and data delivery technology for transfer agent applications, administration, accounting, custody, distribution and other administration functions.”
The data moves between interfaces to meet the daily valuation requirements. This integrated, efficient data transfer eliminates potential errors and minimises operational risks to the investment manager. “We have our own requirements for vendor management, process management, audit, information security and cyber security build into our platform. The funds also have their own integrated processes. Our model fits on top of our clients’ established process,” he says.
The ’40 Act user also might be looking for an easily monitored limit or breach screen that allows them to identify the source of a breach and how to correct it. The best risk management systems allow the ability to stretch the portfolio and create different market scenarios to test which might be out of breach.
TS Imagine and IHS Markit have announced their partnership whereby the OEMS TradeSmart platform, in combination with IHS Markit’s live evaluated bond pricing data will provide real time insights into the global fixed income bond market.
If you have ever thought, “maybe we should collect and store our own data, so that we can have control over it,” or you think that all risk platforms are basically the same when it comes to data, we offer a look behind the scenes at what is involved in building and maintaining comprehensive datasets.