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Bridging the Industry's Tech gap: The Solution for Fund Oversight

In the asset management industry, there's a tech gap between front and back offices. Next Gate Tech's SaaS platform bridges this divide, offering real-time data management, analytics, and oversight capabilities.

Published on 31st of October 2023

Lucas de Lara

The Industry's Tech Gap

The asset management industry is undergoing significant transformation, driven by evolving market dynamics and investor demands. One prominent challenge lies in the technology gap between front office and back office operations. In the front office, where investment decisions are made, there's a rapid adoption of cutting-edge technology, including AI and data analytics. This technology empowers portfolio managers and traders to make informed decisions in real-time, enhancing investment strategies.

However, this technological advancement often contrasts sharply with the back office, which handles fund administration, compliance, and reporting. Back office systems are traditionally less tech-savvy, relying on legacy software and manual processes. This disparity creates inefficiencies and bottlenecks in asset management firms. While the front office benefits from real-time insights, the back office struggles with data reconciliation, regulatory compliance, and operational challenges.

The difference in technological advancement between front-office and back-office functions in the asset management industry can be attributed to several factors:

  • Immediate Revenue Impact: Front-office technology is seen as having a direct and immediate impact on revenue generation. Efficient trading algorithms, risk management tools, and data analytics can directly influence investment decisions and profitability. Therefore, there's a strong incentive to invest in cutting-edge technology in the front office.

  • Complexity and Legacy Systems: Back-office functions, on the other hand, are often viewed as more complex due to the need to interact with various external parties (fund administrators, custodians, regulators, etc.). Many asset managers have long-established legacy systems for back-office processes. Replacing or upgrading these systems can be daunting and expensive.

  • Cultural Shift: There's often a cultural aspect to technology adoption. Front-office staff may be more willing to embrace new technology because it can make their jobs easier and more profitable. Back-office staff may be resistant to change, particularly if it disrupts established workflows.

  • Vendor Solutions: Many technology vendors have historically focused on front-office solutions, driven by market demand. It's only in recent years that there has been a growing recognition of the need for advanced back-office technology.

  • Regulatory Focus: Regulatory changes in recent years have placed greater reporting and compliance burdens on asset managers. While front-office technology directly impacts trading decisions, back-office systems are primarily concerned with record-keeping and reporting. Regulatory requirements have evolved to become more complex, leading to a need for modernization.

However, this gap is gradually closing as asset managers realize the importance of improving back-office efficiency. Modernization efforts, driven by the need for cost reduction, operational efficiency, and regulatory compliance, are pushing investments into back-office technology.

In summary, the asset management industry faces a technological disconnect between the front and back office. Next Gate Tech's solutions play a crucial role in closing this gap, ensuring that the benefits of cutting-edge technology extend throughout the entire asset management process.

Bridging the Industry's Tech gap

In today's fast-paced financial landscape, asset managers are under increasing pressure to deliver near real-time insights, ensure compliance, and manage risks while meeting investors expectations. Legacy systems and outdated technology infrastructure can hold them back, making it essential to adopt innovative solutions. That's where Next Gate Tech steps in, offering a robust set of capabilities to transform your Fund’s Operations.

At Next Gate Tech, we provide cutting-edge solutions through our SaaS platform, composed of 3 technological layers: Data Management, Calculation Engine, Dashboard & Workflow.

Our SaaS platform seamlessly ingests diverse datasets coming from fund administrators, depositary banks, middle-offices, portfolio management systems,... creating a harmonized and enriched source of portfolio data. This robust foundation fuels the platform to generate powerful signals through intelligent analytics which can be used for different use cases.

The result? An enhanced and efficient oversight workflow.

Next Gate Tech Oversight Capabilities

In the ever-evolving landscape of financial services, staying ahead of the curve is not just a competitive advantage; it's a necessity. This holds especially true for Asset Managers who understand that precision, compliance, and efficiency are non-negotiable elements of their operations.

At Next Gate Tech, we're passionate about redefining finance operations through innovation. Let's explore how we're reshaping the future of fund oversight and data management.

NAV Oversight

  • Near real-time monitoring of daily NAV calculations providing truly independent controls.
  • Automated Events generation to notify you about specific attention points and provide comprehensive investigation tools.
  • Insights and Analytics at sub-fund level including performance controls through synthetic proxy, peers clustering & Nowcasting methodologies.
  • Insights and Analytics at share class level including reconciliation of share classes’ performance, monitoring of hedge ratio, Fees (including performance fees) independent controls.
  • Multi-source portfolio reconciliation to compare PMS/OMS holdings with Middle-Office and Fund administrator/Depositary bank ones.

ESG Analysis

  • Covers ESG Consensus scoring at instrument and portfolio level, PAIs monitoring and periodic reporting, ESG exposure analysis & EU Taxonomy alignment analytics.
  • Near real-time monitoring and oversight of ESG related metrics.
  • Automated and custom Events generation for attention points and investigation.
  • Reporting tools for ESG compliance.

Risk Oversight

  • Comprehensive suite of risk analytics based on ABOR including Leverage, VaR, Stress tests and Liquidity analytics.
  • Robust monitoring of risk factors in near-real time.
  • Automated Events generation for attention points and investigation.

Portfolio Manager Oversight

  • Monitoring and assessment of portfolio manager performance.
  • Near real-time analysis of investment strategies and deviations from reference portfolio.
  • Customizable Events generation for attention points and investigation.

The Next Gate Tech Advantage

Don't let outdated technology or manual processes hinder your growth and expose you to reputational or regulatory risks. Next Gate Tech's innovative solutions are designed to elevate your oversight capabilities in a fully automated way through an exception based workflow.

In the fast-paced world of asset management, staying ahead is crucial. Next Gate Tech is your partner in achieving oversight excellence. Explore the future of portfolio oversight with us and unlock a world of possibilities.

If you want to learn more about us, get in touch!