Resolving Asset/Wealth Management Conundrums with Next Generation Outsourcing

Outsourcing Asset/Wealth Management

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Often mitigated by firm limitations, asset managers used to avoid outsourcing that their counterparts in the credit card and mortgage industry preferred to use.

With the change in the operational and global financial structures, offshoring has become a necessity for the investors. It is now used as a strategic tool by their asset managers to cut down costs, bring change in the service levels and support differentiated offerings.

What Has Made The Asset Managers To Adapt Offshore Outsourcing?

Asset managers are conservative and risk averse class. However, what made them changed their mindset and embrace outsourcing as part of their business model? Well, there are three basic reasons, which say why they had a mind shift:

Change in Global Business Model

Asset managers have realized that, in an ever changing global business model, traditional ways are not going to work out. With rapid globalization, customers now demands international assets and want to invest in global capital markets. In the last five years, global and emerging market funds have aggregated to USD 400 billion, says Oliver Wyman in a report. This astonishing figure is making asset managers fall for business process outsourcing.

Change in Demands

Well, today’s complex market movement is seen as multiple arrays of asset classes and products available to the institutional and retail investors. With the rise in demand and information, change in customer behavioral pattern is compelling the asset managers to outsource their business.

Cost Reduction

Asset managers tend to transform price and value equation, target right customers with advisory services, and provide enhanced customer support but all within a fixed budget. RIAs (Registered Investment Advisors) want to focus on operating costs as business is turning complex, thus finding out a partner who can leverage cost-effective solution has become significant. Hence, asset managers’ choose next generation offshoring as a strategic solution.

How State-of-the-Art BPOs Can Help Investment Managers?

Well, Fusion had a face-to-face conversation with some asset managers, who have shown interest in outsourcing their business processes. However, most of them want an instant solution to higher transaction costs and daily paperwork. They now look for partners who can mitigate risks and strike a balance between cost effectiveness and customer satisfaction.

Well, most of the state-of-the-art BPOs like Fusion are reliable and provides industry specific solutions to investment management space, so choosing us as a partner will reduce risk and threats that asset managers often fear.

How Next Generation Offshoring Can Provide Industry Specific Solutions?

  • With the offshoring, the asset management community will adhere to a number of opportunities that can tailor traditional business model, yet build new capabilities for the marketplace.
  • Offshore providers of today can take on ownership of the transactional back and middle office activities with reduced risk and can embolden back office activities related to account set-up, data conversion and work maintenance.
  • Offshore delivery models are going to provide adequate scope that can have high impacts on the operating margins.
  • Offshoring is going to entail additional value beyond cost arbitrage increasing front-to-back agility.
  • Right provider can help asset managers build and support sophisticated asset allocation models, enhancing investors’ decision-making ability.
  • Moreover, the provider can provide investment managers with deep knowledge on underlying processes and metric, develop a variable unit pricing model and will allow more flexibility than traditional FTE pricing structure.

Well, question might arise among the strategist and market critics – “Whether or not a next-gen offshore provider can improve value-equation for the asset management industry?”

A huge gap underlies between extent of domain knowledge and track records delivering end-to-end processes that providers must overcome to serve the investment management space. This business is relatively complex compared to credit card and mortgage industry.

Asset or wealth management sectors in offshore locations like Philippines and India has a substantial rise down the last few years. India is handling large captive operations which continue to generate consistent results. Thus, a number of retail brokerage firms and asset managers have started to leverage outsourcing benefits from simple account set up and compliance reporting to more complex licensed transactions and portfolio advisory services.

What Will Compel Asset Managers To Choose Outsourcing As A Strategic Tool?

The next-gen outsourcing is going to provide a host of benefits to the asset managers such as ability to customize, flexibility in prices that can meet peak and trough of the market and can gain deep insight on the end-to-end processes. Offshoring industry will lift their abilities to provide service in a consistent and transparent manner, to gain confidence of this risk-averse class. At the same time, asset managers must evaluate outsourcing in a more strategic way.

Let’s Move With the Trend

It’s time to rethink and evaluate traditional back-office outsourcing. Now investment industry can get a more comprehensive mix of offshoring with a front office, middle office and back office. Moreover, wealth/asset management industry must focus on right shoring partners as they can serve with onsite and offshore services to meet end-to-end customer needs.

With next-gen offshoring, investment management space can enjoy a larger value play. As it will let them gain competitive advantage and lever improved customer experience 24X7 through multiple channels.

Fusion holds a simple thought on this mindset change of asset managers and their choice of leveraging business to offshoring people. We say:

“Global BPOs are just a catalyst to an asset manager, providing similar services just like we provide others. We invest in delivery models that can meet all complex needs of the concerned industry conveniently. Rather we are ready to serve anyone who looks up for highly valuable opportunity.”

So, join the revolution with the next-generation outsourcing today!