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02-01-2021

Digital transformation in just four steps: Turn the investor into an investor again through

digitalisering alloq

Digitization is a buzzword companies can no longer ignore. Seemingly, everybody needs to do something with it, including professional investors. However, investors only want to do one thing and not be bothered with anything else. All they want is to invest. But there’s always room for improvement. Luckily digitization enables the investors to do what he or she does best, even better: investing.

Time-consuming and complex portfolio information.

These days investors need to provide detailed information. This requires more underlying data. This data are little chunks of information that portfolio managers need to gather for a multitude of sources. Afterward, they need to put it into an Excel spreadsheet or Matlab applications, and use it to manage portfolios. It’s a laborious and time-consuming process. Portfolio managers automate this process the best they can using complex Excel spreadsheets and macros that they programmed themselves. Next to that, portfolio managers are responsible for ensuring these tools are secure. The asset management industry perfected the use of inhouse-developed tooling into a form of art.

Risks of using inhouse-developed tooling.

However, there are many disadvantages and risks when it comes to using inhouse-developed tooling. Manual steps and untransparent macros are prone to human-error. This requires portfolio managers to spend a lot of time on checking and double-checking the data they inputted. The consequence of this is that specialized professionals such as portfolio managers spend time on doing things that waste their talents. Their carefully crafted, and career-driven, knowledge and experience are not used to their fullest potential.

Digitization as a solution for investors.

Digitization can offer a solution. It transformers in-house developed solution prone to human-error into a robust and controlled process. The less manual steps are required to make an investment the better. The time and effort that digitization saves can now be spend on analyzing outcomes and creating investment proposals. As a portfolio manager you rather keep yourself occupied with developing new investment strategies instead of manually maintaining data and applications, right? Do not worry, the solution is at hand.

Invest through digital transformation in four steps

Using the next four steps in digital transformation will again enable you to do what you do best: investment.

1. Have a clear digital vision
Everybody in your organization need to be working towards the achieving the same goal. Employees have to act accordingly, and management has to invest accordingly. Having a clear vision and focus are the first step in your digital transformation

2. Organize your investmentdata
Make sure your data is well modeled, governed and managed. Try to automate the data processing as much as possible, and perform exception-based controls.

3. Take a good look at the current investment processes.
Processes that are handed over from one colleague to another quickly become outdated, prone to human-error and cluttered. Provide yourself and your organization with ample team to redesign these processes.

4. Apply the right investment tools
By using the latest technology small bits of software can be applied to automate the investment process.

Digital transformation is not the end-all solution. However, it will support the investor in doing what he or she does best: investing.

Melinda Rook is a senior manager in the KPMG Asset Management Advisory team. Want to know more? Then contact us..