Client and performance reporting is central to a manager’s ability to compete and differentiate; investment performance and quality of service are consistently ranked at the top of plan sponsors’ wish lists. However, these two functions are less automated and scalable than other less-differentiating functions. Adox Research data shows that a majority of firms struggle to exceed automation levels of at least 60% for these mission-critical activities, which clearly leaves value on the table in terms of automation headroom. If firms were able to reach 90% or higher automation rates, costs would go down, but more importantly, the risk of errors and customer dissatisfaction would be reduced.
Another reason to consider changes to client and performance reporting processes has been thrust to the fore by the COVID-19 health crisis and its impact on work habits: the operational fragility of many high-expertise functions, including reporting. The combination of older technology and concentration of knowledge has increased key-person risk and technological obsolescence. Managers depending on a small team of operations and tech specialists for client and performance reporting face a scarier situation if suddenly teams working from home or a remote location cannot access distributed systems, data sources and co-workers. Add the high volume of transactions and position changes in a more volatile market, and the ability of firms to get by with the status quo solution starts to disappear very quickly.
To ensure a robust and scalable client and performance reporting function, firms require stellar data quality and exception-based workflows so that validated and accurate figures flow through a rules-driven environment that flags problems for review without stopping the entire process. But robustness and scale are not the only key requirements in a highly competitive environment where investment alpha is elusive. Managers want to be able to say “yes” to any requirement—and that means having the flexibility to customize and build bespoke performance and reporting solutions on an individual basis.
That need for flexibility is also driven by shifting user requirements; customer service specialists, sales & marketing executives, and risk managers are interested internal parties for the reporting output along with portfolio managers and analysts. Web-based access to more real-time data is crucial for this stakeholder audience—as is usability and self-service capability.
The current focus on operational resilience and the ability to deliver flexible and customized reporting at scale is helping managers make the business case for change. Doing nothing will not only jeopardize a firm’s customer service reputation, but it will also make it increasingly difficult to compete in a market that is actively looking for managers who have the ability to say “yes” to more sophisticated requirements.
Explore the topic further by viewing our "Investment Performance Measurement and Client Reporting – Managing Key Operations in Times of Crisis" webinar for a discussion of key data points and insights from this research, and how firms can increase operational resilience, build a strong business case for transformation, and adapt to shifting market demands.