What is the client reporting landscape?
The evolution of client reporting in asset management has seen a dramatic shift from manual processes to sophisticated digital solutions. This transformation can be outlined in several key stages:
- Manual Processes Era: Initially, client reporting relied heavily on manual data entry and basic tools like Excel and PowerPoint. This approach was time-consuming, error-prone, and limited in its ability to provide timely, comprehensive reports.
- Early Automation: The first wave of automation introduced specialized reporting software. These tools streamlined the process but often lacked flexibility and integration capabilities.
- Integrated Systems: As technology advanced, more integrated systems emerged, combining data from various sources (e.g., portfolio management, risk, and accounting systems) to produce more comprehensive reports.
- Cloud-Based Solutions: The advent of cloud computing brought more scalable and accessible reporting solutions, enabling real-time data updates and improved collaboration.
- Client Portals: The latest evolution is the rise of client portal reporting software. These platforms offer:
- Real-time access to portfolio information
- Interactive data visualization
- Customizable reporting options
- Self-service capabilities for clients
- Enhanced security and compliance features
This progression towards client portals and digital reporting solutions has improved operational efficiency for asset managers and significantly enhanced the client experience by providing more timely, accurate, and interactive reporting capabilities.
Only 18% of firms leverage outsourced client reporting.Alpha’s 2023 Middle Office Trends survey. Source: Alpha’s 2023 Middle Office Trends Survey
What's your client-reporting operating model?
Client reporting operating models vary significantly among asset management firms, but they generally fall into four main categories:
- In-house model: The firm handles all aspects of client reporting internally, using its systems and staff.
- Outsourced model: The firm delegates client reporting to a third-party service provider.
- Hybrid model: A combination of in-house and outsourced elements, with certain aspects handled internally and others outsourced.
- Technology-driven model: Advanced client reporting software and automation tools to streamline the process.
The choice of model depends on factors such as the firm's size, resources, client base, and strategic priorities. Each model offers unique advantages and challenges regarding control, cost-efficiency, and scalability.
Key considerations for client reporting operating models
Client reporting should not be viewed in isolation but as an integral part of the overall client experience. When engaging vendors, discussions now extend beyond just client reporting. Therefore, it's important to consider the potential benefits of services and efficiencies in data architecture.
When evaluating client reporting operating models, firms should consider these factors:
- Cost efficiency: Analyse each model's financial impact, including setup costs, ongoing expenses, and potential savings.
- Scalability: Evaluate how well each model can handle growth in client base and reporting complexity.
- Technological fit: Assess the compatibility with existing tech infrastructure and the ease of integrating new reporting solutions.
- Data management: Examine the quality, accessibility, and governance of data within each model.
- Regulatory compliance: Ensure the chosen model meets current requirements and can adapt to future regulatory changes.
- Client experience: Prioritise models offering personalised, timely, and accurate reporting to meet client expectations.
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