What Do the Leading Hedge Funds and Asset Managers Have in Common?
What Do the Leading Hedge Funds and Asset Managers Have in Common?
January 2019

Market volatility, international trade wars, and speculation around the next recession is driving investors to be more wary and conservative with their money. 2018 was certainly not the best year for the alternative asset industry, considering how the average hedge fund lost 2%. Meanwhile, some fund managers would have jumped at a 2% loss. So, how are industry leaders responding to all of this? Investing more in their technology infrastructure and innovation.

There’s Still Time to Invest in AI and Machine Learning

You know those messenger bots that spring up on your screen every time you visit a web page? Or those messages in Facebook messenger when you buy a product or sign up for a course? That’s not just affecting the retail and the consumer products industries. After seeing the success and engagement with these bots, financial services and other service providers are following suit.

Because these bots keep end users engaged, save time, and provide quick support for frequently asked questions, big players like Workday and Salesforce are integrating this type of machine learning behavior in their software based on how we use their products everyday.

Why should you care?

Well, it’s an incredibly smart move. Workday is already leading the pack by building intelligent bots directly into its platform. Very soon, users can ask a question and receive immediate guidance on things like how to edit an expense report, or update his/her time sheet. These small improvements will make a huge impact on user adoption and change management as organizations seek to innovate and optimize their systems infrastructure. Furthermore, employees won’t be asking your IT or Accounting department about how to use core functionality. This frees up the time of your Technology Manager or Finance Director to focus on more strategic initiatives like streamlining your existing systems processes, or providing recommendations to reduce costs across your departments.

Learn Blockchain

If you still think blockchain is just another buzzword, now is the time to start becoming more familiar with it. A decentralized ledger is probably the most disruptive technology we’ve seen since the introduction of email and AOL’s dial-up. With more and more companies investing in blockchain, the use of the public ledger will become a critical component to an organization’s technological infrastructure, especially within the financial services industry. In short, blockchain effectively eliminates the middleman and any associated fees, so that only the

seller and buyer are involved in the transaction. This poses a huge risk to brokers, banks, government backers, and any other agent or third-party normally facilitating the transaction and earning fees as a result of it.

JP Morgan and Mastercard have already created their own blockchain networks to streamline payments faster and more securely.

Everything Will Live in the Cloud

If you’re still operating with enormous amounts of hardware, it’s time to rethink that. Yes, we’ve heard time and time again concerns about security within the cloud. However, from our personal experience with implementing cloud solutions, we can attest to the fact that the leading hedge funds and asset managers have made this transition at least a year ago.

Why?

The better question to ask is, why haven’t you? The cost savings are staggering. The dollars you pay for your data centers, servers’ maintenance, and your IT staff can be reinvested in your top talent, Human Resources, and other departments that need it. Not to mention, cloud solutions are extremely reliable, with services available 99.99% of the time. Along with that, so much more productivity and collaboration that can be achieved through the cloud, especially now that the workforce is more mobile than ever.

If you’re not already investing heavily in one of these areas, you’re going to be left behind. 2020 is less than a year away. Let that sink in.

FinServ Consulting has been providing technology and business solutions to financial services firms for over 15 years. For more information on how we can help or guide your strategic direction, please contact us at info@finservconsulting.com or 646-603-3799.

 

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.