Effective communication between investment managers and their clients continues to play an increasingly significant role, especially as technology continues to advance. The only way to build and maintain a strong client relationship, foster trust, improve customer satisfaction, and ultimately contribute to business success is by using modern technology that resonates with the audience.
Data must be easily and readily available, gone are the days of canned reports created by the IT department. As the more tech-savvy Millennials take on leadership roles and generation Z starts operating in business roles, they don’t need or want IT help, they can build technology solutions and mine data themselves. So, in this context customization is about providing easy to use tools, the freedom to query data, and flexibility in how data is presented.
A recent study from Ernst & Young published in April 2023 (link), showed that “Millennials are more than twice as likely (73%) than Boomers (29%) to switch between providers, to move assets between firms or to begin working with new wealth managers”. The article highlights three reasons for this behavior. First, there is a higher risk appetite when it comes to investing in alternative investments and using digital wallets. Second, there is a high demand for digitization and continuous platform improvement through feature enhancements. Third, there is a growing interest in ethics, sustainability in investments and diverse teams.
However, this change must occur without a major impact on cost as article continues that “..this cohort is more concerned (66%) than the average client (54%) about hidden costs”. In other words, while they rely on investment managers to build wealth, they expect the latest technology, fast service, low fees and transparent operation.
A successful client reporting solution will reduce the number and types of client requests as end users receive what they need, or even better, more than they anticipate. The key to this is anticipating client request and enabling self-service, giving end users the power to easily fetch data and present it in a form that suits the current market situation and address client concerns. All of this should be done while automating the underlying processes.
In this article we are going to take a closer look at what SimCorp is doing to support asset owners in client reporting, how they plan to meet market expectations, explore the challenges the company faces, and analyze some of the deficiencies in their solution.
SimCorp's Solution
Part of SimCorp’s solution portfolio is its client communication, an offering that spun off from Equipos which SimCorp acquired back in 2014 (link to press release). The solution consists of four components:
Client reporting which includes fact sheets, balance reports, performance reports, market insights etc. In short, a pre-defined generated report.
Digital portal which gives users instant access to all the data they need to make an educated call, whatever the day, whatever the time.
Data Warehouse (DWH) which gives access to investment data created in SimCorp Dimension and from other 3rd party systems.
Business Intelligence (BI) allows users to query data from the DWH.
The solution is intuitive enough so that it can be used by non-technical business users, for example allowing a new report to be created from modularized reusable components by drag-and-drop. This allows for a quick turnaround from sourcing data, creating content to disseminating digital reports, without the need for dedicated headcounts in IT, while empowering the business.
Data in reports can for example be filtered, grouped, and sorted by investor or by sector. You can see exposure to a certain country or issuer and the self-service capability allows you to customize columns displayed, schedule reports, search content and download data.
In the Workflow Manager the lifecycle of all reports can be monitored. Here you can check for overdue reports and interact with the content. It is here report content can be reviewed and approved prior to releasing it to clients, and where commentary can be managed.
Knowing key factors on how users engage is key to help provide a better user experience. Are they even using the reports? At the back end it is possible to track engagement rate, such as active users, login rates, content downloads and even log questions during client relationship meetings.
As investment managers expand their client base and assets under management, the scalability of reporting solutions becomes crucial. Some users have reported performance degradation when handling a large volume of data and generating numerous reports simultaneously. SimCorp claims to have addressed these issues referencing to client facts: One client has automated 50,000 client reports; another has 9,000 portal users with more than 36,000 automated processes; at a third client, output was increased 23 times and headcount reduced with 80% giving a cost saving of EUR 1m per year.
Staying Relevant
Asset owners cater to a diverse clientele, each with unique reporting preferences. SimCorp Client Reporting must therefore strike a balance between offering customization options and maintaining a flexible user-friendly interface. This challenge involves creating a solution that empowers users to tailor reports without overwhelming them with technical complexities.
While SimCorp Client Reporting excels in providing static reports, it somewhat lacks advanced interactive features that allow clients to explore data dynamically. Interactive dashboards and data visualization tools are becoming essential components of modern client reporting, and their absence could be a deficiency in SimCorp's solution. The ability to request ad-hoc reports that renders reports specific to a client’s standard and with their content is not possible. Similarly, integration between client reporting and the digital platform is not based on APIs and therefore does not give the most optimal streamlined experience.
Integration with native Snowflake connectors to enable direct query of data using native snowflake query tools is another area where room for improvements is needed. It is something SimCorp is looking to improve soon.
SimCorp’s cloud and services strategy extends to the client reporting solution. Improvements to dashboards, the UX and multi-tenancy is planned longer term, including a Reporting as a Service, enabling SimCorp to run client reporting for their customers.
On the digital engagement area, speed and uptime improvements are the key focus areas. Data management and loading will be improved and better handling of Disaster Recovery to reduce downtime.
But the biggest area SimCorp is focusing on is data content and analytics, providing a better user journey and more relevant content. This includes expanding the analytics so customers can better understand how clients interact with the reports so they can better service the end client. Creating the next generation of advanced analytics so users not only know what investors are doing, but know what they will likely be doing next, being on the front of value add.
Lastly the complexity of ESG data (Environmental, Social, and Corporate Governance data) has revealed a need for better handling of complex data to provide better transparency of new data sources, and easier integration of various data types. But also the ability to control the narrative more efficiently. That means SimCorp is building interactive ESG dashboards that allow for scenario modelling to see what happens in the event of certain exclusions which should lead to better education and trials of presenting data.
Looking Ahead
SimCorp’s Client Reporting undoubtedly plays a pivotal role in the investment management industry by simplifying the complex process of client reporting. However, like any technology solution, it faces its fair share of challenges and deficiencies. Navigating the intricate landscape of data integration, customization, regulatory compliance, and scalability while providing a user-friendly interface and real-time insights is no small feat.
While SimCorp continues to improve and refine their solution, it is important that they address these deficiencies to maintain a competitive edge in the market. As the investment management industry continues to evolve, the success of SimCorp Client Reporting will hinge on its ability to adapt, innovate, and deliver value to asset managers and their clients.
There is no doubt that these improvements are to the advanage of the users receiving the reports, but at the end of the day they are still reports with limited to no query possibilities. The tools are for the asset owner to use to create the reports, not the customers reading them. And we would love to see that barrier broken and empower SimCorp's clients, clients.
We hope you found inspiration in this article. If you have any questions or comments, please reach out to us, we love to hear from you, the Community!