Buy-side reaches automation roadblock in search for efficiencies
Buy-side firms keen to automate manual processes are finding it difficult to identify areas for transformation because they are tied to legacy systems that are costly to replace. A survey of 100 companies in north America by asset management software provider SimCorp InvestOps found that just over half identified automation as a top priority as they strive for greater efficiencies. Fixed-income trading and collateral management are now partly automated, however, corporate actions and alternative investments remain manual, and further automation is proving a challenge. "It is very difficult to achieve automation across numerous, disparate legacy platforms," said Marc Mallett, vice-president of product at SimCorp in north America.
Buy-side desks are targeting the automation of manual processes to cut costs and improve efficiency, according to research.

A survey of 100 heads of investment operations at North American buy-side firms, carried out by SimCorp InvestOps, found automating processes was the top strategic objective for 54% of respondents.

Currently, the most commonly automated areas of operations are derivatives processing, workflow processing, alternative investment, performance measurement, client reporting, payments and reconciliation.

Other areas including fixed income trading and collateral management are part way automated, while corporate actions and alternative investments remain manual, according to those surveyed

The research said this illustrates “the conundrum of buy-side heads of investment operations who are trying to drive down the costs of operations, adding value to the bottom line’ but have also largely exhausted automation options.”

The buy-side faces several challenges when trying to automate processes due to legacy systems and platforms and the cost involved.

Marc Mallett, vice president of product at SimCorp in North America, explained: “It is very difficult to achieve automation across numerous, disparate legacy platforms. The more an investment manager can simplify their application architecture the better positioned they will be to automate and realise efficiencies.”