Now, more than ever, automation of back-office functions at mutual fund companies is critical, according to a new whitepaper from Confluence.
In the wake of the financial crisis, transparency and control will become ever more important at mutual funds, hedge funds and other managed investments, Confluence said. Regulators, for one, will recognize this and most likely impose additional rules.
A wave of more stringent regulation and oversight is coming, and that wave is going to break squarely on the back office, said Kirk Botula, executive vice president and chief operating officer of Confluence. This regulation will require even more reporting transparency, stricter process controls and enhanced compliance monitoring. Manual processes lack the flexibility and control fund administrators need to meet these heightened demands.
As well, with many jobs cut, remaining personnel will have increased workloads that they will only be able to manage through more automation.
Sean McKee, senior leader, asset management, at KPMG, added: These times or market stress and the increasing demands of the global business environment on investment managers are creating a real need to improve information systems and processes to enhance reporting for regulators and investors.
A recent Confluence survey found that half of fund companies use spreadsheets for more than 25% of their fund administration reporting and expense management. A full 76% want to decrease the use of these manual documents. Confluence found that 90% of spreadsheets consisting of 150 rows or more contained at least one significant mistake, according to the whitepaper.
The Confluence whitepaper is available for free at: www.confluence.com/transparencyandcontrolnow