How transforming the front office can build a platform for growth

EY helped a leading asset manager redesign its front-office operations, technology, and workflow.

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The better the answer

How can technology make the front office more flexible?

Replacing multiple legacy systems has created efficiencies, agility, and scale, improving growth and profitability.

Like many large financial services organizations, a leading asset manager faced a number of pressing challenges such as globalization, digitization, and industry trends including pressure to lower fees, passive investments and sustainable products.

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To address these challenges, the organization needed to modernize its front-office technology. One aim was to create greater efficiencies – but, just as importantly, there was also a desire to leverage technology to drive growth and make it easier to launch new products.

However, its operations were increasingly hampered by a proliferation of legacy technology systems, thereby contributing to the problems faced by portfolio managers. The organization was keen for the best-performing individuals to have more decision-making authority across various funds, in order to maximize ROI. However, because the funds straddled different lines of business and legal entities, this involved working on multiple investment management platforms that were not integrated, making it difficult for the portfolio managers to get a single overview of how their funds were performing. Similar issues arose with the platforms supporting other key functions such as cash management, order management, and compliance.

EY has extensive experience in technology transformation and were engaged to assist the asset manager with its front-office transformation project. The key outcome was the replacement of several existing order management systems with new trading platforms for fixed income and equities businesses. Alongside that, EY enhanced the organization’s compliance function by consolidating legacy technology, upgrading to a new firm-wide data model, and rationalizing compliance rules to a single investment compliance engine.

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The power of people with proven experience

EY's transformation program involved experienced professionals from a wide range of practices.

Over several years, EY has executed an end-to-end technology transformation for the asset manager, from helping to select and implement the most appropriate front-office platforms to supporting change management in the organization.

At the heart of the transformation project was EY’s experience with a leading front-office investment management platform that offered the ideal solution for the client’s equity trading platform and its compliance issues. EY had made a strategic investment in these skills and had individuals with experience with as many as 20 implementations of the platform.

“We started building this specific competency within our technology consulting practice six years ago,” said Anil Kant, Managing Director, Wealth and Asset Management Technology. “That’s what helped us put together a great team on the ground, which worked with the client for several years to support the transformation. We carried out the entire remapping of the client’s data model to map directly to this investment management platform, and did the same for compliance, recording all of their investment rules from various legacy systems to one instance.”

The EY team also developed a number of technological innovations in the course of the transformation program that has since been deployed more widely in the asset management industry in areas including robotic process automation for rule coding, agile sprint reporting, effort estimation and workflow, and trade-mode testing.

A multidisciplinary team

But beyond IT, this was a truly multidisciplinary effort by EY, with staff from nine different practices and multiple service delivery centers working on the project. Apart from technology specialists, the team included business analysts from the Consulting practice, who gathered information on the client’s requirements, and change management professionals from the People Advisory Services practice, who helped to drive the program and manage its impact on the various stakeholders within the organization.

Moreover, because the asset manager needed key members of its own investment operations team (among others) to dedicate significant amounts of time to the transformation program, EY staff performed their roles and helped ensure the day-to-day work of the organization did not suffer.

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Flexibility and scalability that drive growth

The client’s new front-office technology platforms now enable an efficient work environment to launch new investment products.

As a result of the transformation program, the asset manager’s multiple legacy compliance engines and order management systems have been decommissioned, replaced in each case by a single platform. This simplification has resulted in significant cost savings and efficiency gains.

This increased operational efficiency has, in turn, had a beneficial effect on profitability. For example, thanks to the modernization of the investment management platforms, various funds can now be managed on a single platform across different lines of business and legal entities smoothly, without technology getting in the way. Portfolio managers now have access to better data and new ways of using it to inform their decision-making.

The new order management solutions also enable the scalability of the organization’s business and give it greater flexibility to support new products and investment vehicles across all its lines of business. For example, the asset manager is planning to launch a major new product, for which EY helped lay the foundation, over the next few years.

Kant sums up the impact of the transformation program: “We implemented a technology solution that drove real business value. It enabled the client to access new markets and thoughtfully grow the business. This wasn’t just a technology project.”

EY refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.