|[March 26, 2014]
TabbFORUM Buy-Side Community Survey Reveals the Pains of Legacy Technology
NEW YORK --(Business Wire)--
a leading provider of investment
management solutions and services for the global financial services
industry, today announced the results of a joint survey with TABB Group
with respondents from 44 buy-side firms. Findings indicate that outdated
back-office capabilities negatively impact the agility of investment
managers, compromising their ability to find new sources of liquidity,
and ultimately, the capability to grow their businesses.
The issues discovered in the survey findings suggest a disparity between
technology investments made in the front- and back-offices. According to
Alex Tabb, COO of TABB Group, "The tendency for firms to invest more
heavily in front-office technology than back-office platforms has
created an 'operational disconnect' between the need to get into new
products to drive alpha generation and the actual ability to do so.
Whether you are a buy-side trader or a sell-side market maker, you need
to be able to move in and out of markets and strategies deliberately and
with agility. The fact that 57% report that their current back office
systems do not support new market entry without the need for workarounds
is troublesome, especially considering all the attention that has been
given to the dangers of managing complex proceses on spreadsheets."
Key survey findings include:
56% indicated that their firms experience either significant or
serious levels of pain as a result of legacy technology in the system
88% of respondents still rely on Excel spreadsheets to manage some
front-, middle- or back-office processes. Spreadsheets create several
versions of the truth and as a consequence, the integrity of the data
being relied upon for business strategies and management decisions is
not sound enough.
57% report that their current back-office systems do not support new
market entry without the need for workarounds.
75% are currently unable to process newer, more complex securities
like swap functions without having to perform multi-step manual
interventions, thereby increasing error rates.
70% rely on investment accounting systems that only refresh
front-office systems overnight, increasing the importance of the need
for an IBOR which provides up-to-the minute data across all asset
"An overreliance on manual interventions, especially when it comes to
processing increasingly complex investment instruments, introduces
systemic challenges that sooner or later will have to be dealt with,"
explains David Kubersky, Managing Director of SimCorp North America.
"Firms that operate with a short term, 'wait and see' perspective when
it comes to adopting a state-of-art investment management system are
running the risk of becoming legacy themselves if the system
infrastructure in place cannot support the growth initiatives of the
To read more about the survey findings, please visit TabbFORUM.
Since 1971, SimCorp has been providing investment and portfolio
management software and services to the world's leading investment
managers, asset managers, fund managers, fund administrators, pension
funds, insurance funds and wealth managers. SimCorp's world-class
software provides global financial organizations with the tools they
need to mitigate risk, reduce cost and enable growth. SimCorp is a
global company, regionally covering all of Europe, North America and
Asia Pacific. Listed on the NASDAQ OMX Copenhagen, SimCorp is dedicated
to supporting the global investment management industry, its clients and
its investors. For more information about SimCorp's products, please
About Tabb Group
Based in New York and London, TABB is the research and consulting firm
focused exclusively on capital markets, based on the interview-based,
"first-person knowledge" research methodology developed by Larry Tabb.
In 2010, TABB launched TabbFORUM, the online capital markets community
for peer-to-peer contributed opinion and analysis covering current
issues, tracked daily by 20,000-plus professionals; in October, 2013,
QuantFORUM went live, an online channel for the global quantitative
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