What are the key challenges that asset managers and private banks face in the Financial Services industry today? Being able to process high volumes of unstructured data as efficiently as possible and generally trying to keep up with the competitive pace are two such pressing issues. These are linked to rising pressures of forecasting, pricing, and scalability too. With these in mind, we sat down with Quartal Financial Solutions’ International Sales Director, Gary Liley, (one of our longstanding partners) to find out how firms can adapt to state-of-the-art technology and combat the complexities of the FinTech evolution.
To mimic the competitive financial market, new automated software solutions are in greater demand, with compliance at the forefront of change. “If you talk about the investment management space in general – such as asset managers, wealth managers, private banks, etc. – they are all being driven, for many reasons, towards a much more compliant and regulatory environment,” Gary touches upon. “Financial institutions are also being driven to consistently save money and reduce their costs. Due to the highly-competitive market, firms are being driven towards how they charge their clients. That whole competitive landscape is something they try to address.”
In comparison to the market 20 years ago, asset managers would typically charge higher fees which has changed in today’s climate. “The cost of servicing your business doesn’t matter as much when you’re making more money. In today’s competitive climate however, the pressure is on,” Gary states. “There are so many companies offering asset and investment management services that fees have been driven down. To accommodate more competitive pricing, you need to find ways of managing your business effectively. This includes automating as much as you can, improving the efficiency of how you automate it, and reducing the risk of manual intervention. All that says to me is you’ve got to use more intelligent technology.”
With traditional and smaller firms that may be averse to integrating automated systems as part of their business model, there are many fears surrounding automated platforms that Quartal seek to quash – especially clients who seem content to continue using Excel. “There is that issue. Depending on the size of the company, our target market is companies investing in technology with a business case. That business case will justify what they can spend, in line with the cost of our software,” Gary points out. “many of the smaller Investment Managers continue to use in house solutions, with a fair degree of manual intervention. It’s difficult to talk those people around, if they employ someone who is adept at using Microsoft Excel, can construct all the algorithms they currently have, and produce monthly invoices – that may be more cost-effective for them. However, our turnkey financial solution offers further benefits with a range of innovative features with a focus on compliance and reduced risk. These include personalised pricing, automated exception handling, and easy access to comprehensive MI data.”
There are also the recent legislation surrounding regulations and compliance, namely GDPR and MiFID II, which have forced automated service providers to proactively adapt their services. “The markets we serve are very volatile for several reasons: the number of regulations, the need to be compliant, due to the audit requirements, and because the market is constantly moving,” Gary stipulates. “There are many things happening that we need to be aware of. If a customer buys a software package today – they’ve invested in it, so we must ensure they are comfortable and know it is future-proofed. Therefore, our relationship is a long-term partnership, which includes carrying out regular updates to the software throughout the year.” In terms of future changes, Quartal is geared up for the years ahead. “Should certain regulatory changes occur, we’re looking at the product roadmap over the next 24-months – all from a practitioners’, financial, and regulatory perspective. We also have a major release of the product every 12-15-months.”
So, with the updates and new versions always being anticipated – what has Quartal got planned in the next 3 to 5 years? “We have our next software release in mid-2019, which encompasses different regulatory standards, taxation, reporting, different fee structures – the list goes on and on!” Gary continues, “Some of that will be done in partnership with our clients who want to take the release further with bespoke requirements.” An important part of Quartal’s future roadmap is delivering realistic updates for product releases.
But we do know the pain-points for today’s asset manager, which Quartal Financial Solutions aims to alleviate, such as producing accurate invoices in a timely manner, helping to minimise errors. “At a higher level, asset managers face huge pressures to reduce operational overhead, so automation helps with the desire to provide a robust, accurate, and timely service for clients,” Gary advises. “Financial reporting is also key internally as well as externally.” Everyday problems are at the core of Quartal’s support network too.
The conversation doesn’t have to end here, as Gary will be at TSAM Boston on November 15th for 1-2-1 sessions.