How technology elevates investor experience and compliance

How technology elevates investor experience and compliance

The asset servicing industry is currently navigating through turbulent waters, marked by escalating fee pressures, rapid technological advancements, stringent regulations, and a volatile macroeconomic climate.

Amidst these challenges, asset servicers are under pressure to evolve as they grapple with shrinking margins and the escalating demands and expectations of both fund managers and investors.

Fenergo, which is helping to future-proof client lifecycle management, has delved into how asset servicing firms can create a competitive edge in 2024. 

A significant indicator of the competitive landscape is a 2023 survey revealing that 25% of global fund managers are considering changing their fund administration providers in the next 12 to 18 months, primarily in search of enhanced service levels, superior data quality, and better technological solutions.

Despite the consensus on the pivotal role of technology in shaping the future of asset servicing, the adoption rates remain surprisingly low. An EY survey found that only 15% of asset servicing firms have integrated workflow management systems for managing investor lifecycle management (ILM) operations. This highlights a crucial opportunity for digital transformation focused on a comprehensive approach to ILM, which promises to streamline operations, enhance data quality, and automate routine tasks—thereby improving operational efficiency and scalability.

A standout client and investor experience is vital for differentiation in the asset servicing sector. Modern investors, particularly millennials, prioritize digital capabilities when choosing investment management providers. By enabling investors to self-serve through digital platforms, asset servicers can significantly enhance the onboarding experience, reduce application times, and provide greater transparency. Extending self-service features to fund managers can further improve efficiency and client satisfaction by offering real-time access to investor applications and fund subscriptions.

Regulatory compliance presents another avenue for asset servicers to distinguish themselves. By proactively adapting to the evolving regulatory environment and leveraging technology capable of scaling with regulatory demands, asset servicers can position themselves as thought leaders and trusted partners to their clients. Solutions for compliance with regulations such as the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) are particularly in demand, offering significant opportunities for asset servicers to support fund managers with complex tax classification and reporting requirements.

The adoption of digitalization and investor lifecycle management technology solutions, such as those provided by Fenergo, is crucial for asset servicers aiming to secure a competitive edge. Fenergo’s holistic approach to ILM enables asset servicing firms to eliminate manual processes and adopt a digital-first model for investor, client, and fund onboarding operations. This not only reduces costs and promotes transparency but also ensures regulatory compliance is seamlessly integrated into operational models without the need for additional technology platforms. Fenergo’s solutions offer pre-packaged journeys, codified policies, and in-built risk models for over 120 jurisdictions, facilitating automated compliance and an exceptional client and investor experience.

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