Leaving the Pit Lane: Reengineering Your Client Reporting Operating Model to Rejoin the Race

Tom Williams, Chyavan Rees

It has never been more important for Asset Managers to surface impactful and timely information for clients quickly, accurately, and in engaging formats. Firms need to satisfy the demands of current clients while also capturing market attention to drive growth.

Most Asset Managers meet this basic information need through client reporting. This often uses labour-intensive manual processes to deliver a product that is bespoke and has a range of data sources, but also often lacks clarity and is operationally complex. As a result, these reports can fail to help Managers differentiate against peers to their end client.

80% of respondents in Alpha’s 2020 Asset Management Digital Readiness Survey identified client reporting as the primary target for automation and transformation benefits. Yet many Asset Managers are struggling to reap the benefits of technology vendor offerings which in theory should address many of these ongoing issues.

In this article, we explain why the time is now for firms to invest in their client reporting operating model and how to get started on a journey to ensure maximum benefit is seen from existing or upgraded systems.

Clients are moving the dial of expected market practice

The global shift to remote working is driving increased data expectations, and in a world with less contact, this is making differentiation harder. Clients have a clear hierarchy of needs, and in order to differentiate against peers, firms need to exceed market practice:

Why now?

  • Impact of Covid-19 – Reduced client contact and increasing data expectations
  • Improving technology capabilities – Shift from on-premise systems to SaaS/RaaS solutions, leaving a large performance delta between legacy systems and current leading vendor offerings
  • Increasing pressure on fees – Fund charges are being driven down leading to a focus on expensive & inefficient reporting operating models which are a significant cost and impact client satisfaction
  • Diversification of product offerings – Product landscape expansion requires a nimble and scalable reporting capability
  • Regulatory change and a focus on ESG – Alongside regulatory change, Client Service teams are inundated with ESG data requests beyond standard report content
  • Competition to improve the client experience – Clients continue to expect a higher quality of service. Client reporting is an increasingly key component of this experience and firms must continue to improve in this space, or risk falling behind competitors

How can improvements be made?

Traditionally, Asset Managers have followed an in-house client reporting model relying on legacy systems, manual processes, and touchpoints between numerous teams. As technology evolves, the gap between these legacy approaches and leading vendor offerings is growing. There are two leading alternative operating models that firms can adopt:

  1. SaaS reporting – Cloud-based vendor products that use automation and dashboards to manage outputs, improve transparency and reduce manual intervention. Implementation allows firms to benefit from continuous product enhancements and reduce the maintenance overhead associated with on-premise systems
  2. Outsourced client reporting – Simplify the operating model and remove internal inefficiencies by moving to an outsourced model. While this reduces control over client reports, it can be cost effective, increase the speed of production, and simplify the Manager’s technology stack

As the industry evolves we expect to see a shift towards ‘Next Generation Client Reporting’ with dynamic access to real-time data. Firms must plan with the end in mind, ensuring any re-engineering of the operating model includes a simplified technology landscape supported by integration of data. Without putting data first, firms will greatly limit their ability to maximise any investment in client reporting technology.

Why laying a foundation of data is critical?

Data quality is key. To realise benefit from implementing a new reporting solution or outsourcing client reporting, firms need good data. Investing in the governance, maintenance, and quality of underlying data should be the initial priority. Done correctly, this will reduce costs, improve long-term client delivery, and differentiate in the market. Data is the foundation for successful client reporting; you can’t build a Formula 1 car without the engine, and similarly, you must address the data first.

What can you achieve?

In our experience, firms who have established a data foundation and invested in their client reporting operating model have benefited from a range of internal savings alongside benefits to their end clients:

How can Alpha help?

We recognise that there’s no ‘one size fits all’ model for client reporting. Alpha is uniquely positioned with our Operations & Distribution SMEs and vendor understanding to work alongside you, to implement an operating model that realises benefits and implements leading technology effectively.

Please get in touch with us to discuss your client reporting approach and how we can help you on your journey.

About the Authors

Tom Williams
Associate Director

Tom is a programme delivery and Risk Management expert with over a decade of experience working in the Investment Banking and Investment Management world. He currently works with Senior Management at clients across the Asset Management sector, specialising in Enterprise Risk Management and has been leading one of the industries largest client reporting programmes for the past two years.

Chyavan Rees

Chyavan is a Manager at Alpha with over 5 years’ experience consulting within the financial services industry. Chyavan has a range of distribution & operations experience, including target operating model design and recently supporting one of the industries largest client reporting programmes.