Copenhagen-based buy-side technology provider SimCorp has published the results of a poll examining the impact of portfolio accounting systems on an investment manager's growth strategies and their vulnerability to operational risks. Respondents included 75 executives from over 50 buy-side firms across the US and Canada.
The poll, conducted last month, revealed that close to half of the respondents are not confident that their current accounting systems can support the launch of new products in a timely fashion. Additionally, almost 40 percent of firms surveyed, state that they cannot support all major asset classes in one accounting system, leaving their organizations open to errors across a number of business processes, including:
• Data reconciliation
• Portfolio valuations
• Exposure calculations
Interestingly, 63 percent of those polled claim they have updated their accounting systems less than five years ago.
"Technology is failing the buy side," says David Kubersky, managing director of SimCorp North America. "Deficiencies such as a lack of multi-asset coverage in accounting platforms will erode competitive advantage for quick time-to-market of new products. Alternatively, if the back office opts for spreadsheet workarounds, they will expose the firm to operational risks associated with reconciliation and settlement mistakes."
Respondents were also asked to describe the tasks and operations critical to their business but not supported by their current accounting platforms. Answers included:
• Data visualization via dashboards
• Limitations in setting up new securities
• Derivatives processing
• Asset-class management
• Trade confirmations
• Intra-day account set-up.
If the back office opts for spreadsheet workarounds, they will expose the firm to operational risks associated with reconciliation and settlement mistakes.
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