Managing your wealth, no matter how big or small, is a cumbersome task. Your financial advisor helps to keep your money safe while making it work for you. Before you start working with someone, ask them these important questions.
What Certifications Do You Have?
You need to know what licenses and certification your financial advisor has. Most of the top consultants are certified public accountants, fund specialists, consultants, or analysts. Some even carry a Juris doctorate and insurance licenses. While everyone has to start somewhere, you want to work with a firm that has extensive experience in the field.
What Safeguards Are in Place to Protect Assets from Fraud?
Your assets need to be protected by a reputable custodian. When you ask about safeguards, you should also ask about any infractions he or she has received in the past both with the firm and as an individual. To provide you with the best service, your financial advisor should be a fiduciary.
Consultants with a strict code of ethics have standards that they share with their clients. However, no matter their standards, they should be in compliance with Financial Industry Regulatory Authority, state and regulatory agencies, and the Security’s and Exchange Commission.
What Are Your Fees?
When it comes to fees, your counselor should be 100 percent transparent. He or she needs to explain his or her exact fee structure, so you understand how you are paying. Some are fee-only, meaning they provide a flat rate for services rendered.
Some investment consultants charge a commission fee. That means they make money off each product you purchase to help your investments grow. It is important to know which one you are working with, or if you are with someone who charges a fee in addition to earning commissions.
What Access Do You Have to Earning Reports?
As your financial advisor, he or she should have direct access to the top holdings of where your investments are. He or she needs to be able to tell you immediately what the earnings report is anytime you call.
At the very least, he or she should be able to educate you on your holdings before any investment of assets. By educating you on available options and what assets are invested, you can better understand what the consultant suggests.
How Often Do You Communicate
When it comes to letting you know how your money is doing, the counselor should be open to communication. He or she should send out weekly announcements about the market. Also, you must be informed of trade notifications immediately and receive an explanation on every buy and sell option. Most firms also send out information about their monthly investment outlook as well as a quarterly outlook. Brokers also offer to keep their customers informed with educational information and fact sheets.
It can be quite daunting to decode the jargon of financing businesses. In most cases, because of the similarity in the objectives of the different financing solutions, many have a tendency to exchange one for the other.
To simplify these very technical terminologies, most especially when you just have ventured into business and you do not have enough knowledge about it, here are some useful information regarding a fixed capital investment, which is one of the relevant business solutions businesses, either big or small, can opt for.
Facts About Fixed Capital Investment
First, they are often used to launch or perform businesses. Over a long period of time or about 20 years, they depreciate on the accounting statements of the company.
Second, though these investments can depreciate over time, they won’t depreciate the same way. Be reminded that there are investments that lose their value faster than the others. The perfect examples of those that devalue fast are communications equipment or devices since there is a rapid turnover of technology for these. Another excellent example is the company vehicles. Within the year of purchase, the value of a brand new company vehicle can depreciate by as much as 40%.
Third, fixed capital investments won’t devalue rapidly. There are actually cases where it can even increase in value. Real estate properties like the company’s office buildings and land are among the examples.
Fourth, these will include the acquisition of tools and equipment required for daily operations, along with the real estate properties where the goods are to be produced and stored. Remember though that the materials used in the production of goods are not included due to the fact that these aren’t retained by the company.
Sixth, the amount of fixed capital will be different from one industry to another. There are enterprises that would require higher fixed capital investment than the others. These will include oil companies, telecommunications providers, and the engineering and manufacturing firms. On the other hand, businesses that will just require limited fixed capital are those that within the service industry. And these will include the law and accounting firms since they require more compact devices, tools and regular office appliances.
Lastly, getting fixed capital often takes a considerable amount of time. Thus, it is crucial to work with a reliable, competent financing institution that can efficiently minimize the risk of financial losses through a wide variety of proven methods.
Security intelligence is the data related to safeguarding an organization from any outside and inside threats along with the processes, and policies developed to accumulate and evaluate the information.
It can also be referred to as the actual collection, standardization, and analysis of the data created by users, applications, and structures that influence the IT security and risk position of a business.
On a daily basis, information flows in organizations for the senior management to make smart decisions. The various stakeholders (employees, customers, contractors) are interfaced through various technologies.
However, the technological infrastructure can also result in serious security issues. The probable areas of intrusion are unlimited. Security experts and business leaders are trying to find an answer to the question – Is it feasible to have a robust security in an increasingly interfaced environment?
Though the answer is yes, it needs a radical transformation in processes and practices encompassing the financial services sector. The focus is not only on IT. Robust security facilitates a positive customer experience.
Cybercrime and Profitability
Financial institutions are at great risk since they are perceived to be an easy target for cybercriminals. According to a survey by IBM, “Financial markets, insurance, computer and professional services together account for over 40% of all security incidents worldwide.”
The losses, pertaining to cybercrime in other sectors could be due to industrial intelligence and fraud related to intellectual property, but in banking, online fraud is a possibility.
Any fraud related to the intellectual property and industrial intelligence could lead to reduced shareholder value, shut down of the business and net financial losses. These are the issues impacting the global financial sector, not only because the main reasons are not identified or the disruption to the customer is immediate, but also because they can result in a significant loss of money.
As per Andrew Haldane, Financial Stability Director at the Bank of England, “Cyber-risk has become a more pressing concern than economic depression and the Eurozone crisis, as it is a rapidly rising area of risk with potentially systemic implications”.
Comprehending the seriousness of the security risk is only a beginning. Financial institutions must establish an in-depth security intelligence strategy that would enable the financial institutions to have an insight into the perceived threats.
Financial institutions leverage top-notch analytics to get an understanding of:
- The types of attacks that are occurring.
- The probable source of the attacks.
- The technology used by the cyber criminals.
- Weak spots that could be exploited in the future.
Michael Davison, Banking and Financial Markets, IBM, stated,” There’s not another single issue that unites the interests of so many people at senior levels of banks. It unites technology, the CFO, security and compliance functions. But cybersecurity is also mission critical for people running lines of business and who are running P&Ls. So quite rightly it sits on the Board agenda. But there’s still work to do to educate Boards about the urgency of an effective response to the rapidly changing environment.”
Financial institutions must implement the following practices to get the balance between the required innovation and the related risk:
Establish a risk-conscious culture
- An organizational transformation with an emphasis on zero tolerance towards a security failure must be established.
- An initiative encompassing the organizational hierarchy to execute smart analytics and automated response competencies is needed to identify and resolve issues.
Safeguard the Working Environment
The functions in distinct devices must be examined by a centralized authority and the wide array of information in an institution must be categorized, tagged with its risk profile and circulated to the concerned personnel.
The greatest problem with the IT systems and the unnecessary costs is from executing services initially and looking at security afterwards. Security has to be a part of the application from the first phase of design.
Ensure A Safe Environment
If the system is secure, security personnel can monitor every program that’s functioning; ensure it is ongoing and operating at optimal level.
Manage the Network
Organizations that route approved data through controlled entry points will be in a better position to identify and separate the malware.
Cloud Based Security
To prosper in a cloud scenario, organizations should possess the technology to operate in a secluded environment and track probable issues.
An organization’s security strategy must also involve its vendors and efforts must be made to establish the best practices among the vendors.
Financial firms have been a major target for malware attacks. Several aspects are impacting the financial sector. The direct connection between the breach of several personally identifiable information (PII) to the profitability has not been lost on the global financial stakeholders. This has led to the implementation of several global security projects.
A hazardous type of malware for online financial transactions is “Man-in-the-Browser” intrusions. It happens when a malicious program affects an internet browser. The program adjusts activities conducted by the user and in some instances, can initiate actions independently. It could lead to online stealing.
Financial institutions that can transform radically at a fundamental level, the way they function would be safeguarded.
The aim of enterprise security could initially emphasis on IT structures, it must be extended from the technology personnel & their systems to each individual within the organization, and all the stakeholders conducting business with it.
A tax function’s capability to provide value depends on how well it is able to modify to the constantly evolving regulatory alterations at present, while contributing to a firm’s business strategy.
Often, most corporate tax activities are not able to address the operational incompetence. Increasing regulatory needs and restricted resources indicate that tax divisions are under constant pressure.
Progressive tax departments are performing an in-depth current state evaluation that delivers a roadmap of distinct actions, cost, and comparative significance of the tax functions to reflect enhancing efficiency.
These evaluations take into account the existing operational condition, organizational culture, and an aptitude for change.
The tax scenario is becoming complex as firms are expanding their sales & operational reach into other domains and facilitating mergers & acquisitions.
Information required for the tax functions is normally decentralized and stored in systems customized for financial & management reporting. This requires a substantial initiative to not only revamp the information for tax purpose but also comprehend the position of different tax instructions.
The pressure from globalization, increasing the requirement for efficient utilization of resources, and expanding focus on business synergy is forcing business/tax stakeholders to modify their approach towards tax operations.
The progress of tax operations is a continuous process, be it an outcome of strategic alteration as requirements emerge and circumstances transform. The questions surrounding tax operations revolve around normal operations, development in global tax governance, efficient utilization of tax data analytics, and international risk management competencies.
In the recent past, severe economic circumstances facilitated several business transformations that had an indirect effect on tax operations.
Currently, risk and existing business preferences are critical factors influencing tax operations. Tax stakeholders are concerned with the tax risk and it is one of the most important priorities.
The factors influencing the regulatory and risk environment are as follows:
- In-depth emphasis on peer tax rates.
- An increase in control by tax authorities.
- Change in international business models.
- A boost in the requirement for organizing the international capital.
- Discussion on corporate governance and tax avoidance.
- Uncertain tax legislation.
- Critical regulatory environment.
- Leadership emphasis on decreasing tax.
- Enhanced importance of reputational risk.
Tax authorities also felt that quality impacted global tax compliance/reporting and was the number one concern. The other factors – tax cost and the capability for value addition were also key issues.
In other words, tax authorities wouldn’t be able to accomplish the expected outcomes by functioning normally, instead, they have to change their operations. However, the process of modifying the tax structure, while maintaining service quality is complex.
Efficient tax firms can maintain performance in a volatile business environment since they are excellent at change management. They have a robust leadership team, efficient resources/tools/technology, clear communication, effective service delivery methods, business analytics, and performance standards.
In order to cater to complex requirements, several tax activities are accepting a hybrid operating method, complementing the efforts of internal corporate tax personnel with an interface of top-notch internal/external sources.
Two critical features of tax operating models are tax centers of excellence (COEs) and shared service centers.
Centers of excellence are specific, delivering a distinct service. For e.g., the creation of indirect tax returns/statutory reporting. On the other hand, shared service centers are multi-dimensional and consist of many tax controls.
There aren’t any customized solutions. Distinct solutions are exclusive to specific tax department requirements. For instance, using internal human resources would be appropriate if there exists an adequate current scale via a delivery network, security threat, and data management.
However, it won’t be a binding solution – the tax personnel from a specific sector could leverage current service center to manage special tax segments, while a firm could use the current finance & accounting methods to perform “traditional tax assignments”.
A robust internal tax system would enable an organization to manage tax operations effectively while displacing internal personnel for specific functions.
Co-sourcing gives an organization the opportunity to use the tax expertise that would not be available internally. It also provides the opportunity to shift the organization’s resources to some other use.
The offshoring of tax functions/processes provides the following advantages:
- Lesser costs.
- Internal personnel can emphasize high-value functions.
- The possibility of establishing a relationship with global personnel.
- The scope for leveraging time zones.
Agents in the financial services sector play a crucial role in sustaining the business. Financial services encompass broad sub verticals like – banking, insurance, and investment funds companies where their crucial role like building relationships and getting business volumes cannot be underestimated.
Personalized sales are the approach set by agents and brokers for decades. They carry a lot of information on products, markets, and prices. But after the IoT, big data and analytics came to the center stage, it became imperative for agents and brokers to stay relevant. The mobile customers supported by mobile workforce of businesses are posing existential threats to agents and brokers. Many may wonder – is this the end of the road for brokers and agents?
Financial services honchos may consider eliminating the role of agents attracting new prospects with reduced premium or discounts. But wait a bit more before you send the execution order as they have the firepower still. It is into this area focused study is required.
Can Agents Stay Relevant?
Now the question before us is, are agents and brokers relevant? First of all they have time tested relationship with a large number of accounts whom they assiduously nurtured. Today, the brokers themselves are mobile and know the IT tools to nurture their audience. With the help of IT apps on their mobile they go for client acquisition faster. In this process, they:
• Contact their prospects and educate them about the products.
• Provide valuable pieces of advice on most feasible product for them.
• Evaluate the performance of securities.
• Build relationship after gaining an understanding on every aspect of customer relationships.
We are coming to the important aspect. Today technology obsolescence is making the role of agents irrelevant. To some extent it is true if the mobile customers make a total shift from agents and have direct interaction with the company. But the question is how feasible is that idea. We all know in our busy schedules, giving priority be it paying premium or buying stocks may not be appealing to all with a few exceptions. The reason behind this is people are not that self motivated and agents step into this gap with their relationship nurturing skills.
In areas like spending money people are little scary as well as slow decision makers. This cannot be construed as weakness but in fact it is wisdom as sensible ones do lot of research and thinking before they take the plunge. What does this mean for the financial services sector? Financial sector services may be enthusiastic about IT tools which helps the customers to take informed decisions. But what is the exact scenario? People will do all research with the tools on mobile but many will be unlikely to take the final purchase decision because there is a need for a resource person to give relevant and contextual information on products and services. This should be followed by the ability to close the deal once the curiosity level is raised to the highest. Who can replace agents or brokers who had been doing this for decades?
So, now the readers might have understood the value of agents in clinching the deal. Getting business is not an ordinary deal. It requires a lot of effort, constant follow up on clients to arrive at a decision. Just SMS alerts won’t do the trick. Having said this, let us consider how the agents can be used creatively with technology in this era of technology disruption. We also need to consider how agents can be empowered with technology and how.
Agents Can Be on Survival Mode with IT Tools
To survive in today’s volatile markets, what is most needed is actionable information. Agents who are working overtime in building relationships and closing deals definitely require latest IT tools, to be specific BI, big data and analytics tools to take key decisions. In the case of insurance, BI tools can help the agents and brokers to derive key insights on customers and understand their inclination to offer customized products or solutions. BI dashboards will help them to manage relationships effectively. So is the case with banking and investment companies who hire third parties for business development.
Application of analytics comes in different areas like content analytics, context analytics and business analytics. In content analytics unstructured data like call center logs, sensor data, audio, video data can be analyzed to track trends, customer responses, etc. In context analytics data is analyzed to understand the context which is vital to take context based decisions. In business analytics patterns, behaviors or trends are discovered through statistical analysis. Last but not least is predictive analytics where application of techniques like statistical analysis, regression analysis, correlation analysis, cluster analysis, social media analytics etc., are applied for new product development.
Agents are catalysts in information gathering as they move with people and trigger discussions on products and services. Because of this stronger reason, one cannot conclude that agents are on their way out in the disruptive technology era. But at the same time agents should take recourse to IT for their survival as well as the survival of financial services businesses. Let time tell the rest.
The ease of making financial transactions and financial services in general, had first been revolutionised when telegraph companies introduced wire transfers. But with the coming of new age financial services like Bitcoin and Ripple, it is the time we address the question of what the future holds for the financial services of the world.
Traditional Wire Transfers
Let us begin by first taking a look at how things have been going on for these past 150 years since wire transfers were first introduced. Transferring funds using a wire transfer method via a bank is not a single step process but a multi-step process. It is like this:
- The sender approaches his or her bank and orders the transfer of funds to an account. Unique codes like BIC and IBAN codes are provided to the bank by the sender so that the bank knows exactly where the funds need to be transferred.
- The sender’s bank contacts the receiver’s bank by sending a message through a security system, such as Fedwire or SWIFT, signalling it that a transfer needs to be made. The receiver’s bank receives this message, which includes settlement instructions as well, and then asks the sender’s bank to transfer the amount specified in the message.
- The sender’s bank now transfers the amount. This is not done in one go but bit by bit, so it can take anywhere from a few hours to a couple of days for the entire sum to be transferred.
- To make the transfer, the two banks must have a reciprocal account with one another. If that is not the case, the transfer is made through a correspondent bank that holds such an account.
As one can see, this form of transfer relies overly on a mediator, takes more time than it should, and can prove to be costly as the banks charge some fee for their service. Distributed currencies like Bitcoin provide a viable alternative to this process.
What sets services like Bitcoin apart from traditional services is that they do not rely on a central mediator but rather operate using cryptographic protocols. The process is therefore faster, simpler, and much more efficient. The system is quite transparent to both end users as well while traditional systems are susceptible to fraud due to the complex process involved.
However, there is a downside to this too. With services like Bitcoin, it is simple to trace a transaction back to each unit value’s creation.
Solution? A Common Ground
More and more people are opting for services like Bitcoin and peer-to-peer mobile transfers, where a network operator could help users transfer funds by simply sending an SMS. Although these are indeed more efficient, they are a long way from global acceptance because there are many who still do not have bank accounts, plus there is the issue of limited user identification in such services.
What would be ideal for everyone is if banks could tap into the potential of decentralized currencies and overlap the source code of services like Ripple on their existing system to form a hybrid of the two. It would kill two birds with one stone as:
- Decentralized currency systems provide more efficient transfers
- Bank systems ensure only registered users access the service, taking away the possibility of foul play.
The world has come a long way since the last time an indigenous financial service system was introduced. There is definitely a crying need to improve this traditional service and decentralized currencies like Bitcoin have shown them the way.
There is no way to avoid dealing with money and finances these days. Therefore you should try to learn as much as possible to help you make good financial decisions and to increase your confidence about money.
When you make a budget, it should be realistic regarding your income and spending habits. Be sure to include all of your income such as alimony, child support, rental income, or any other. Always use your net income not your gross earnings in these calculations. Once you have the numbers, you can consider how to adjust your spending to stay within your income range. To maintain your budget never exceed your incoming cash flow.
The next step is to total up your expenses, and you should make a list of all monthly expenses. Your list should document each and every expense that you have whether it expense, spontaneous or just a one time expense. Remember that this list needs to have a complete breakdown of your costs. Be sure to add in expenses that you have from restaurant dinners and fast food as well as grocery bills. Reduce expenses linked to your cars, such as gas and insurance. If you have payments that you make quarterly or less frequently, divide them up to reflect a monthly payment. Make sure you include incidental expenses, for instance, baby sitters or storage unit rentals. Try to have the most accurate list possible.
Now that you have a good idea of your income and expenditures, you can start planning a new budget. Look at each expenditure on your list, and decide what you could do without. If you normally buy coffee from a cafe, calculate how much money you would save on a weekly basis if you bought it from McDonald’s instead, or made it at home. Exactly what and how much you are willing to compromise is completely up to you. The first step is identifying expenses that are not necessary so you can use the money for something else.
If your utility bills are rising, you may want to upgrade your appliances to save some money. Upgrading to well-fitted double-glazed windows, for example, can reduce your heating bill dramatically. Besides you can repair any leaky pipes and only run the dishwasher with a full load.
Swap old, inefficient appliances for those that use less energy. Although doing so may cost you some money upfront, over the long-term you will save a fair penny on your utility bills. Unplug the appliances you do not need. In time you will notice significant savings in your energy consumption.
You can make a significant decrease in your heating and cooling bills by improving your insulation, as well as the roof above it. Insulation or roofing issues can be very costly, as maintaining a regular temperature in the home can be expensive. If you invest in the upgrades, it will save you a lot of money in the long run.
Using these tips not only saves you money, but it also helps you start bringing your budget under control. An expensive upgrade can save a lot of money in lowering electricity or water bills. This is one way that you can make your budget more reliable.
Getting a taste of the real world jobs out there that pertain to your area of study can be an eye opening experience. You will work side by side those that do this type of work day in and day out. Such information can further fuel your passion for the career path you are on. It may help y to narrow down the specific area of the field you wish to go into.
With a Citi summer internship, you will have an unforgettable opportunity to get onboard for such learning experiences. These positions are limited though so you need to pay attention to the deadlines for applying. You also need to submit all of the requested materials with your application. Otherwise, you may not get that position you really wanted.
Large Financial Institution
They are one of the largest financial institutions available. They want to do their part to help encourage others to get involved in the world of finance. There is a wide spectrum of types of jobs that fall under the umbrella of their services. The various Citi summer internship areas include finance, technology, human resources, global transaction services, and commodities.
Apply for the ones that you are the most interested in. If you apply for more than one, you can only select one to take part in. However, applying in more than one area does improve your chances of being selected. Your dilemma at that point would be deciding which one to accept if you accepted for more than one. That is a bridge you can cross when you get to it!
Who can Apply?
You are eligible to apply for a Citi summer internship if you a junior or senior in college, you are a graduate student, or you have recently graduated from college. In addition to business skills and experience, they are looking for those who excel in the areas of communication and integrity. A passion for a career path in business is a strong asset they look at when deciding.
You can apply for a position in the USA, Africa, Europe, or the Middle East. They have a very diverse business culture with locations all over the world. Being able to work in your location or being able to get an internship in a location you wish to travel can be very appealing.
It is also encouraging that you will get paid for your participation in a Citi summer internship. This is good news because many companies offer internships that aren’t paid. They feel the experience they teach you is compensation enough. Being able to work for an excellent company like this and get paid to do so is the icing on the cake!
The amount you will earn depends on where you work and the common entry level salary offered by Citi Bank in that area. The specifics about work hours and payment for the position can be discussed once the offer is extended to you.
Application that Rocks
As you can imagine, there are plenty of people applying for the various opportunities. You need an application that rocks to be considered for one of the Citi summer internship positions. Complete the application neatly and providing as much information as possible. Your supporting documents including your resume and cover letter need to be exceptional.
Focus on sharing your experiences, your education, and your future goals relating to the world of business. You will need to provide letters of recommendation so ask for those early. Get them from professionals you have worked with, long term family friends, past employers, and others who know your work ethic and character. The Citi summer internship can be a dream come true!
The world without any considerable doubt can be easily considered as one big market. Trade and business are the only two things that keep the world running. Yes, there are inventions and discoveries as well, but they are also traded to get through with an ample amount of profit.
People can easily come around with one or the other form of business. Either they own it or work for it. Each of these businesses thus has their financial statements and records. Without these, the business may well disappear.
There are many forms of finances that a person might practically have to deal with. There are the mutual fund investments. There are the hedge funds and many more. There are many best financial services companies that are present nowadays that help people.
These financial services companies ensure of the very fact that people do get the best results from the business that they are in. There are various advantages that people may enjoy if they hire the financial service companies.
Before moving further on the topic, people should understand that what exactly is the financial planning? This is something that can help people in a long course of time and thus help in managing the finances the best.
Why Recruit the Financial Service Companies?
There are many reasons why a person should think of hiring these services. Financial services can be well considered as one of the very important services, and the following are the various advantages that the companies providing them can guarantee:
• Consulting: Yes! The financial consultancy services are one of those most important things that are necessary before any decision to invest. Consulting helps in various things. People can ensure that they are getting through with the most important knowledge of finance and these companies do provide with that.
• Taking Care: the main aim is to take care of each and every financial gains and loss in the company. Evaluating them and taking the necessary actions. These can be done by the professionals only, and this is the only reason why people should ensure that they do have one of these financial companies to aid them.
Apart from these two important advantages that people can come around with they should also ensure that there will be much more advantages if people select the best ones for themselves. Only the very top financial services companies can ensure of the fact that the best services will be provided.
The following are the best advantages of recruiting the top notch services:
Free Services: The top financial service companies believe in the very fact that the people can only get the very best of the results if they do have a hope in the fact that their services by no means are frauds. This is the exact reason why they provide the people with the various free financial planning services.
Varied Services: This is again one of the major advantages of the top notch companies. The very first thing is that each and every company that is top notch is there because of the excellent knowledge that they do possess. They believe in the fact that the various services that they will provide ill attract the customer’s attention. They have knowledge about various things like portfolio management.
Creation of The Portfolio: This is something that cannot be achieved excellently just by any company. Only the top notch ones will work the best to provide with absolutely marvellous results on the portfolio. They will change as well as customize them according to the customers. Also, they will help in managing them.
One of the biggest threats that most Portfolio Managers face is the prevalence of legacy systems.
Over the past three decades, investment advisors have been empowered by the advent of technology from simple spreadsheets to complex home-grown systems. From that time to the present, the industry has seen exponential growth and with it, enormous complexity. Challenges include round-the-clock trading in markets from New York to Sydney, varying accounting standards, shortened settlement cycles, and of course, increased regulation and security issues to name a few. As if that were not enough, technology seems to change every day leaving many legacy systems struggling to keep up with customer demands. Cheaper, faster, smarter, and more efficient norms are expected – they cannot be the exception. Failing systems can sharply undermine your company’s ability to service its customers and maintain its market share, much less grow the business.
In this age of big data, business intelligence, and data analytics, legacy systems can represent a massive risk to your business. If day-to-day operations require the ability to manage process, distribute, and accurately report financial data, being behind the curve is not an option. If this sounds familiar, it is time to ask, “How did we get here?” and more importantly “How do we get out?”
Here are the seven signs that will tell you if you have a decaying system and how it must ideally operate:
1. Facing difficulties while managing data due to disparate systems?
Maintaining data in different systems or manually moving move data from one system to another will lead to inconsistency and errors. Is your data quickly identifiable, consistent across multiple systems, complete, accurate, and reconciled among different systems? If your answer is a NO to these questions, you must reevaluate your platform. Your system must be able to eliminate manual data flow, update all the data with a single change, deliver timely and accurate reporting including intra-day, and make data easily traceable.
2. Are your client communications professional?
Investors expect your reporting to be clear, concise, and highly customized to their needs. This statement holds especially true for institutional investors. Organizations that can meet these expectations will have an immense competitive advantage over those that cannot. If your current system does not deliver the level of reporting your clients expect, you will run the risk of falling behind.
Your client expectations are not limited to the form and content of reporting, but also to how you deliver information. They expect instant access to real-time information, be it through a web portal or a mobile platform to stay relevant and highly competitive, your systems must be flexible enough to send and receive communications via any channel of your client’s choosing.
3. Struggling to cope with complex global investments?
Dealing with multiple regional and global investment regulations such as UCITS V and VI, Solvency II, AIFMD, and EMIR is a daunting task. All these regulations require you to maintain reliable, accurate, and transparent data. To comply with these regulations, you need Workflow Management, Data Management, and accurate reporting. Data, managing risk, and maintaining accuracy is critical to comply with regulatory reporting requirements.
With the increase in data sources and data complexities, your organizations need solution providers who can help you manage your data. Your system must not only be scalable but also provide actionable business intelligence in a format that is easily understood.
4. Finding it hard to achieve Integration of disparate systems?
Real integration is not a matter of simply connecting systems – your systems must be able to talk to each other seamlessly. Manually moving data from one system to another affects your efficiency, thereby, increasing the risk of errors. Integrating disparate systems not only reduces these risks but also improves efficiency by ensuring that back office and front office personnel can view transactions, cash positions, and holdings identically. This ensures that the entries are recorded accurately in your Investment Book of Records (IBOR).
Many organizations use multiple systems for accounting, reporting, reconciliation and managing client information. If different vendors have provided these systems, making them talk to each other could be a challenging process. If you have workarounds or portfolios that reside outside of your legacy system, it is time to rethink its usability. Your system must allow centralized and standardized portfolio management activity. In an end-to-end portfolio management solution that is built on open architecture, the work of multiple systems is consolidated into a single platform. Such a solution will allow easy access to third-party systems or any other system that is built in-house, thereby enabling you to reduce technology footprint while driving greater efficiency.
5. Escalating legal and compliance costs?
A 2013 survey of Chief Technology Officers suggests that one of the biggest operations and technology challenges that asset managers face is to comply with the current and future regulatory requirements. The complex regulations make outdated reporting systems more of a liability than an asset. The compliance costs of regulations such as AIFMD, UCITS V, and VI, or FATCA-are overtaking many budgets. Additionally, aggregating data from different systems for compliance reporting is a risky and resource-consuming process. To reduce these risks and costs simultaneously, your system must be prepared to deliver consolidated reporting, by leveraging automation, integration, and standardization of data from various sources. Your systems must also eliminate the manual compilation of data for reporting, thereby increasing efficiency and cutting associated compliance labor costs while ensuring integrity, consistency, and reducing your operating risk.
6. Being scrutinized by Investors’ due diligence?
After surviving the global economic crisis of 2008, institutional investors have become extremely wary of due diligence, leading to immense scrutiny of operations. The 2008 crisis exposed operational risks – the risk of failure that not only involved market forces but also the lack of infrastructure and controls. Investors have also become increasingly tech-savvy; they are asking the right questions and know what to find. To remain competitive in this vital market, your system must stand up to the intense investor scrutiny. You must show that you have the controls in place to manage the risks efficiently and that you are already adhering to well-organized processes. If Investors sense any gaps in your workflow and find that you are dependent on manual processes and workarounds, they will take their money elsewhere.
7. Legacy systems are not supported, serviced, or enhanced in the way you expect?
A product is only as good as its provider. Is you provider paying enough attention to you after the sale with 24/7 support? Does your provider have a track record of continuous product updates? Do they provide product training? Are they attentive to your suggestions or new ideas? Your provider must provide long-term support if you want your new system to last. Your product must be scalable, flexible, and must be built on open source technologies. In addition, your provider must not only help you set up but also ensure that your systems perform optimally without any disruptions. A relationship is a two-way street; as such, providers must be able to respond to your issues quickly, and also help your business adopt new functionality as and when it is needed.
Invest in your growth
A portfolio management system is the heart of your business. With a weak system, your business can be at serious risk, and you may not have the time to address it before it fails completely. Investing in technology will give you greater efficiency, reduced risks, and help you make informed decisions. Your provider, therefore, must have a proven track record of being committed to long-standing services, continuous improvement, and support you as you grow.