At some point, business owners need to make a decision on further development in terms of digital transformation. The financial sector is among the most emerging and demanding ones from the users’ point of view. Clients switch to platforms with better characteristics regarding decision-making time, the performance of financial transactions, data processing efficiency, and security. Today, as the financial world is working towards asset management digitalization, it is important that the software used is reliable and that it’s in line with the industry trends. We will tell you about the types of asset management software, their benefits, functions, and the nuances to be considered.
A few words about asset management software and its benefits
Asset management software is a system allowing for almost any kind of online transaction with the user’s assets and portfolio. It includes the tools that display the current state of the assets and a stock portfolio:
- creation of an asset register and tracking of assets,
- portfolio risk assessment, balancing returns and risks,
- real-time verification of investment data,
- performance indicator analysis,
- financial planning,
- regulatory reporting,
- automated sending of personalized notifications, etc.
Digital asset management solutions allow managers to make informed decisions, allocate assets the best way possible, and receive high returns on investment. The strengths of these programs include:
- continuous portfolio monitoring and asset management through integrated apps;
- process automation (data logging, reporting, modification of the fund structure depending on the situation, etc.);
- assurance of compliance with regulatory requirements and adjustment of processes to changes in legislation;
- assessment of risks and performance indicators, including market risks and stress testing;
- increased information security due to data backup and access control.
Components of asset management platforms
The design of asset management systems varies depending on a company’s business goals. Such platforms usually include the following modules:
1. Portfolio management
The solution provides automation of asset portfolio management. With this solution, managers get an idea of the current situation on the market and investment limits and adjust their strategy accordingly. The module automates the processing of transactions and portfolio modification.
2. Valuation of stock
This module is designed for back-office operations such as fund accounting, settlements, and payments (you can learn more about dedicated accounting software from our article on this topic). This includes such key functions as asset valuation and account keeping.
3. Analytics of performance indicators and risks
These parts of the system are responsible for performance indicators, risk assessment, and reporting. The platform evaluates data essential for effective asset management, such as portfolio liquidity and risk exposure. This helps analysts compare investment options, make asset calculations, and mitigate risks.
Asset management regulations set out strict reporting requirements. With the help of digital technologies, it is possible to automatically generate reports in accordance with financial regulations. In addition, managers and clients receive information on the current situation in a convenient mobile format.
What to look for when choosing software
One asset management company differs from another, and there is no one-size-fits-all solution. Therefore, the cost-benefit analysis of the new technology should be carried out based on the size of the business, its location, the specificity of services, and types of assets.
For example, every company faces a choice between cloud-based and on-premises software. Implementing the on-premises solution is more expensive and time-consuming. It requires the acquisition of in-house servers and the involvement of system administrators to install and maintain the platform. However, such software is considered to be more secure than cloud hosting.
The benefits of asset management in the cloud are in its flexibility and openness to new features. Users don’t have to wait for the next release of the software to introduce changes.
Custom software vs. a ready-made solution
Another nuance that needs to be considered is the choice between a custom solution and a ready-made product on the asset management software market. The latter option may seem cheaper, but it’s worth studying the subject in greater detail.
An out-of-the-box solution is often incompatible with the existing systems in an organization. This results in extra costs for IT specialists to make the necessary modifications. Moreover, each off-the-shelf technology usually has additional features that a company will never use. Such a risk of overpaying for unnecessary asset management tools must be taken into consideration. One can also work on a subscription model, making interval payments for the right to use the ready-made product.
Tailored solutions make it possible to create customized reports, turn to developers for technical support, and stay connected to systems 24/7 via mobile apps. The interface part of a platform designed specifically for a company improves the firm’s reputation among its clients.
Such software adapts to the specific character of the business, works much faster, and ultimately requires fewer resources in terms of money and time. For example, it can have custom data fields for some particular assets or just the feature set that users need.
Digital transformation of asset management is impossible without the use of state-of-the-art technology and innovation. Today’s users are picky about products – they have learned to distinguish good offers from bad ones. Therefore, financial institutions need reliable asset management software with the most advanced features. This will enable them not only to make prompt and forward-looking decisions on the user’s assets and portfolio management but also to comply with the industry trends and standards.
Asset management companies face the task of choosing the best possible option based on their specific character and customer requests: to implement an on-premises solution or move to the cloud, to choose ready-made or custom software, to include the necessary modules and functions into the system, and so on. If you need help in making a decision, order a financial consultation from Andersen’s experts. We will provide all the information needed for the digital transformation of your business based on your goals and expectations.