Investment managing firm Bridgewater Associates launched the first dual-party outsourcing model for middle- and back-office processes with BNY Mellon and Northern Trust
Key processes like settlement and management of Bridgewater's books and records will be taken on by BNY Mellon as the primary processor while Northern Trust will independently record the transactions using the same information. This dual process, Bridgewater said in a statement, negates the need for an internal team shadowing BNY Mellon and reduces the possibility of errors.
Outsourcing these key processes, Bridgewater co-chief executive officer Eileen Murray said in the statement, allows the investment manager to focus on its core strengths while maintaining regulatory efficiencies.
"It will provide us with accounting, operational, and regulatory efficiencies, and allow us exceptional operational resiliency between the primary and secondary processors," she said. "It is a unique system and an industry first that we believe will be well received by our clients and the industry."
Bridgewater, which has $150 billion in assets under management, will also be able to leverage data from both of its outsourcing partners for its business needs.
BNY Mellon CEO of Asset Servicing Samir Pandiri said in a statement the outsourcing model will grow as firms see rising costs,
"The growing complexity of middle- and back-office functions and rising technology costs are driving the need for more efficient information delivery and data management platforms," he said.
Bridgewater will retain a small quality control team to monitor the model and maintain standards. The company said this model "is designed to exceed the typical industry shadow model."
Should regulators take a more active role when it comes to AI oversight, or leave it to the professionals? What will M&A look like in 2018?Subscribe to Weekly Wrap emails