Risk & Performance Analytics

Significant Struggles with Risk and Performance Analytics in the Front Office

Portfolio managers are challenged by data-accuracy, risk & performance analytics

NEW YORK, March 22, 2016 /PRNewswire/ — A recent survey released by SimCorp, a leading provider of investment management solutions and services for the global financial services industry, has revealed that portfolio managers are facing significant challenges when it comes to data accuracy and risk and performance analytics in the front office.

The survey was conducted during a recent webinar hosted by SimCorp titled “Risk & Performance Analytics: Making the Front Office a Better Place.

The life of a portfolio manager is often fraught by multiple systems, Excel sheets and frequent manual manipulations in order to gain an up-to-date 360º view of investments.

Seeing the full range of data

The survey, which polled 54 individuals from 34 firms across North America, revealed that:

  • 76% of portfolio managers claim that they do not have the ability today to see the full range of risk figures and performance numbers for their total portfolio in one place and act upon them from there.
  • An overwhelming 89% of portfolio managers surveyed cannot see on-demand performance and risk figures based on the latest positions and market data intra-day.
  • Less than half can drill down to the underlying prices, security master, and transactions for their positions.
  • Only 39% can easily perform pre- and post-trade compliance checks on risk figures for their total portfolio.

When making investment decisions, timing is critical. Without fast, efficient, and automated workflows, asset managers may find themselves having to manually identify, investigate, and resolve discrepancies and errors, which can detract from the investment process. A modern front office provides clean and real-time data, an instant overview of the impacts of investment decisions, and automated workflows for all asset classes and geographies.

“The front office needs to focus on alpha generation, not error remediation,” explains Marc Mallett, Vice President, Product & Managed Services, SimCorp North America. “Having accurate risk and performance analytics readily available makes all the difference. A solution that provides an immediate overview of all relevant performance and risk ratios, receives updates to all numbers intra-day, drills down to the underlying data, performs what-if analysis, and executes pre- and post-trade compliance checks, plus sends orders to the trading desk and monitors as they become executed is what modern investment managers need to look for in order to operate efficiently and make the best possible investment decisions.”

The role of technology and operations in alpha-generation

The life of a portfolio manager is often fraught by multiple systems, Excel sheets and frequent manual manipulations in order to gain an up-to-date 360º view of investments

“Breaking Down Buy Side Barriers: Achieving Alpha through Agility,” TABB Group’s latest research by senior analyst Dayle Scher, reflects similar findings on the role of technology and operations in supporting alpha generation:

“In order to grow and scale, it is imperative that firms’ front office applications such as trading and risk platforms are able to speak to each other in the same language, as well as to any other supporting system such as performance measurement and accounting. More importantly, these front office applications need to contain a golden copy of every piece of information that passes through the back, middle and front office without lengthy system reconciliations that can delay the investment process. Inconsistencies and discrepancies that arise in an order management system or risk analytics package can have multiple – all negative – consequences. The decisions and strategy that investment management firms make today about their underlying technology applications will contribute to their future success or failure.”





About SimCorp
SimCorp provides integrated, best-in-class investment management solutions to the world’s leading asset managers, fund managers, asset servicers, pension and insurance funds, wealth managers and sovereign wealth funds. Whether deployed on premise or as an ASP solution, its core system, SimCorp Dimension, supports the entire investment value chain and range of instruments, all based on a market-leading IBOR. SimCorp invests more than 20% of its annual revenue in R&D, helping clients develop their business and stay ahead of ever-changing industry demands. Listed on NASDAQ Copenhagen, SimCorp is a global company, regionally covering all of Europe, North America, and Asia Pacific. For more information, please visit www.simcorp.com.