Streamline Financial Operations to Support Front-Office Ambitions

The year 2025 is shaping up to be a time of volatility and uncertainty. What else is new, right? Some assert that American business now operates in an era of uncertainty... in perpetuity. It makes investment management much more challenging. Deloitte theorized that “...Investment management firms {that} may be facing the steepest risk/reward curve in decades.” Some firms may play the volatility game better than others, striking a skillful balance between offense and defense, remaining opportunistic while shielding against volatile events. Many are seeking new revenue opportunities. All firms should employ sound risk management strategies across the board.

No matter the strategy, competition is fierce under a backdrop of thin margins, higher costs, geopolitical crises, and regulatory shifts. Cost and revenue management has never been more connected to driving alpha. Let’s discuss practical methods for investment firms to shore up financial operations management to support front-office ambitions and seize a competitive edge.

Cost reduction in finance operations

Recently, ESJ MarketWatch reported that 89% of fund managers believe that the US stock market is currently overvalued, which has led to a reduction in cash reserves to levels not seen since 2010.

Keystrokes and clicks in Excel sheets take up time. Time is money. Salaries are money. Firms seeking to reduce operational costs by optimizing financial workflows and reporting can save serious time and money. Modernized end-to-end operational infrastructure reallocates a firm’s salaries to more valuable efforts like driving risk-adjusted returns.

Optimize treasury and reconciliation

For example, managers save their reconciliation analysts considerable time with advanced reconciliation solutions. They optimize accounting efficiency with solutions that auto-populate and auto-recommend actions based on reason codes and intelligently aggregate and reconcile disparate entries from different administrators.

Meanwhile, a fund’s treasury team can save time by accessing investment data faster through tools that automate margin processing and enable real-time collateral tracking. They can leverage accurate collateral data and treasury analytics faster than the competition. At the same time, as treasury teams save time, they also achieve higher-value functions. They maintain correct margin levels, develop effective counterparty risk mitigation strategies, and improve cash flow management.

Our treasury solution helps firms optimize operations and make complex decisions with confidence.

Improving accuracy and compliance with streamlined reporting

A digitally transformed treasury solution eases the middle-office's reporting and compliance burdens as well. Investor relations analysts and fund accountants can seamlessly generate granular margin, financing, and collateral reports for clients and management. Ideally, in today’s sophisticated markets, they need a unified view of investment data that enables them to do so across all asset classes, strategies, and trading venues. This level of operational agility reduces challenges when onboarding asset classes, allowing for growth.

Self-service, configurable templates within investment lifecycle technology is important in today’s complex ecosystem chock full of multi-strategy funds, multi-manager platforms, and the convergence of public and private strategies. Solutions with self-service capabilities enable leaders across departments to customize their tools to suit their unique use cases. Furthermore, low-code and no-code tools reduce the need for IT’s resources and speeds the time to market for new strategies.

All firms need to seamlessly generate detailed allocation and investor analyses with automated data sourcing to deliver timely, enhanced financial reporting accuracy. Faster, more precise reports translate to fewer regulatory fines and greater investor trust. Without solid back-office operations and quality data, upstream compliance becomes an exercise in futility.

Operations to deploy any strategy at scale

Investment management firms prize risk resilience. Many front-offices are expanding or launching new derivatives trading strategies to hedge against interest rate, FX, and commodities risk, an extremely relevant concern given the volatile energy markets and international trade and political strife. As such, firms need to execute post-trade swap management solutions to remain efficient, compliant, and profitable in a highly regulated market.

They can unlock operational efficiencies with automated modeling of swap activities that adapts as volumes increase, new structures are traded, and esoteric counterparty terms are added. The simplified workflow results in granular reconciliation of all swap components, independent margin calculations at the trade and portfolio level with integrated collateral management and call dispute workflow. Once again, efficient operation infrastructure has made a firm’s front-office objectives possible.

Check out our ebook detailing how technology can help firms streamline operations, tackle inefficiencies, and build the agility needed to thrive.

The competitive edge of automated financial workflows

Most funds are cutting costs, as McKinsey notes, “The discipline of improved cash management in the near term (and accelerating cash generation) are vital to achieving long-term returns.” Managers are rushing to optimize data and operational infrastructure to unearth efficiencies and cut costs. Moreover, firms that streamline all middle- and back-office workflows and easily access a single source of data truth can efficiently deploy any strategy at scale. They can optimize capital efficiency, increase productivity, and reduce operational risk.