Client reporting is a corner of investment management that has remained largely untouched by technological transformation for a long time. However, in the last year or two, disruptive developments have emerged that promise a compelling evolution. We predict three trends that will become everyday facets of the client reporting process by 2030.
API data access
Increasingly, we hear that certain types of investors are asking for direct access to their investment manager’s data through web-enabled application program interfaces (APIs). These connections allow consultants, distributors, and institutions to pull data directly from managers on demand.
Cloud-based platforms such as Salesforce have normalized the use of these connections over the last ten years. Tools such as Microsoft Power BI make connecting to these APIs straightforward, enabling powerful aggregation and manipulation of the data. More recently, cloud-based data platforms such as Snowflake, armed with configurable “pipes” have become cornerstone strategies for how investment managers and their administrators are thinking about the future of their data strategy.
Digital reporting portals
In addition to the traditional print reporting process, an increasing number of firms will provide a digital reporting portal to clients. These portals are more than just a place to pull reports – they can provide full historical access to data and ‘what-if’ interrogation – for example, ‘does my portfolio hold fossil fuels?’ Some even offer transaction capabilities.
Not only are clients delighted by this new touchpoint, but the reporting teams are also relieved of many ad-hoc requests. In fact, these digital portals will facilitate ad-hoc reporting, allowing users to create their own reports through easy-to-use user experiences. The benefits to both parties make this a case of ‘when, not if’ they become more mainstream.
Kurtosys makes creating investor portals pain-free. The Kurtosys platform enables configuration of interactive investment dashboards, sharing of privileged documents, surfacing gated insights, and exposing clients to sustainability related data. Integrating portals into existing ecosystems of digital tools such as Salesforce, Azure AD and Adobe serves to help clients transform the reporting experience for investors.
Greater agility in reporting teams
Client demands for bespoke reporting will continue, so the above two trends will not replace existing processes but rather augment the toolset. Consequently, reporting teams need more agility in how they deliver, as managers seek to win more mandates and provide investment flexibility to investees.
Much of the commercial technology still in use today was built in a pre-cloud era, is unwieldy, and inflexible.
The demand for greater agility will force retooling. There is space for a new breed of tools that consolidate and improve the process and enable client reporting teams to do more with the same resource.
Key Drivers of Change
While the above trends have their own momentum, several secular themes are propelling them forward and may expedite their arrival.
The first is the huge trend towards environmental, social and governance (ESG) investing. This wave of ESG has now hit reporting teams, and most agree that the evolution of this type of reporting will continue as the industry figures out the right approach and level of information required. We see many managers preparing for investor demand to access their sustainability data and research. The sheer volume and complexity of this data make print reporting an unsuitable medium in most cases. Digital tools offer the capacity and flexibility to report on it effectively.
The next theme is the general increase in demand for investor data. Pre and post investment investors are demanding more and faster access to their investment managers’ data. As entrepreneur Clive Humby said in 2006, data is the new oil. Asset allocators now expect real-time access to this critical resource. As more managers acquiesce, others will feel pressure to do the same.
Another theme propelling these reporting trends is cost. Across the investment management industry, driving down incremental business costs and preparing for scale are top priorities. In client reporting, we see managers looking to segment their client base to provide equivalent service levels at lower cost ratios. Specifically, we see managers trying to service their less cost-effective clients through a digital channel in a ‘one and done’ fashion, while providing their top-tier clients with the traditional bespoke service.
Changing perception of reporting tools
Reduce the compliance risk of inconsistent data, manual intervention and time spent producing reporting outputs. Kurtosys provides a comprehensive automation solution for a multitude of investment management reports. With one central data source, multiple integration options and pre-defined workflows, data and insight delivery almost takes care of itself.
If you are considering switching reporting technologies or improving the processes around what you currently have, we would be more than happy to help you understand your options with Kurtosys. We offer exploratory conversations and discovery sessions, proof of concept, hands-on demos, and access to our consultants to review your existing operating model.
Find out more about how we could help you with portals and client reporting, and reach out to us for a free discovery session and hands-on demo.
This article was originally published on 22 February 2021.
Momentous changes are taking place across the investment industry, reflecting the re-alignment of capital to environmental and social good. We interviewed a range of senior market participants from well-known firms to understand the current intersection between ESG data and technology and its future direction. Download our white paper to find out more.
Patrick McKenna
Global Head of Sales & Product
