Fund sponsors have long debated the relative merits of building, buying or outsourcing fund administration technology. As sponsors face more and more data-driven demands from regulators and investors, there is increased pressure to adopt new efficient technologies for fund administration process such as expense payments and budgeting, regulatory reporting and financial reporting. While there is no one-size-fits-all answer to the "build, buy or outsource" question a mix of cost pressures, resources, reporting requirements and technological advances have tipped the balance in favor of "buy" and "outsource."
While Software-as-a-Service (SaaS) is a model that has long been adopted for enterprise solutions, it promises to become the new norm in financial services technology and I believe that the impact for fund administrators will be game changing. SaaS will give fund sponsors flexible, scalable access to technology applications that automate routine, often manual back-office processes. This means that fund sponsors who contract directly with cloud-based technology providers will have a competitive edge and be best positioned for improved data integrity and control.