The trend in asset management has been to outsource many middle and back office processes in order to cut costs and gain efficiency. For companies that keep these operations in-house, the desire to be nimble on product development and able to respond quickly to client needs can sometimes be done in a more cost effective way than outsourcing. Others, with complexity on the rise, choose to let an outsourcing partner take care of the details and concentrate on their core investment management business. One of the most common reasons Dan Pitchenik, principal in PwC's asset management advisory practice, said PwC's clients cite for keeping back and middle office functions in house is shadowing some of the efforts of the outsourcing partners. "Our clients can triangulate and make sure everything matches up. This is particularly relevant for some of the control functions," he said.
Another reason Pitchenik said clients cite as a rationale for keeping processes in house is to keep a tighter bond with internal clients. "Another reason that I don't hear quite as often is retaining partnerships with the middle and front office and trying to strengthen those ties to have a more intimate relationship and understanding of internal clients. There's a tight governance around those particular interactions," he said.