The Buy Side Supply Chain: An Evolution

The Path of Unbundling the Asset Management Supply Chain
by Jay Wolstenholme, June 16, 2016
Industry Trends
Global

Abstract

Celent has released a new report titled The Buy Side Supply Chain: An Evolution. The report was written by Jay Wolstenholme, senior analyst in Celent’s Securities and Investments practice.

High margins and superior returns have allowed the asset manager’s front-to-back applications and operations to remain static for years. But now, in the low return economic environment, front-to-back efficiency is critical to survival. Asset management firms are placing operational and technical improvements as a top priority in order to stay competitive and minimize operational risk.

This report examines the asset manager’s front-to-back investment workflows, the necessary systems and components needed for optimal investment and operations, and the supply chain of vendors, custodians, and fund administrators providing these services.

Continuing lower returns, added operational costs due to growing regulation, and overall low operation margin have all weighed heavily on the industry. “But history tells us that down business cycles can also be a time of opportunity,” comments Wolstenholme. “Other industries, such as airlines and automakers, were forced to become leaner and operationally cost-efficient. So now is the time for asset managers to take advantage of the growing supply chain.”

The good news is that the market is flush with vendors, including both seasoned platform vendors and a multitude of startup Fintech choices. The hungry startups are not only providing edge-of-the-envelope ideas and products but are also causing established suppliers to refresh and improve their offerings and technology to keep their edge. 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

 

Key Research Questions

4

$100 Trillion Plus and the Buy Side Supply Chain

5

The Components of the Asset Management Supply Chain

9

The Supply Chain Component Providers

12

 

Resource Supplier Detail

14

Conclusion

19

Leveraging Celent’s Expertise

20

 

Support for Financial Institutions

20

 

Support for Vendors

20

Related Celent Research

21

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