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Client Reporting – time to evolve?

Citisoft, Client Reporting, Data Normalisation Hub, Intelligent Automation, Private Banks, Wealth Managers

June 02, 2017

  • Citisoft
  • Client Reporting
  • Data Normalisation Hub
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From both a business and a vendors’ perspective, the term ‘client reporting’ is increasingly inappropriate and lacks the necessary ambition to be effective in today’s investment management world. This situation is partially as a result of the terminology that the function uses and the perceived lack of added value within the client reporting process.

Essentially, many of the reporting solutions on the market today are largely designed to solve existing problems, such as the automation, control and governance of the current client reporting and sales information. For almost every firm within investment management though, be they institutional asset managers, retail asset managers, wealth managers and even private banks, the focus should no longer be about client reporting; the emphasis has shifted to improving the client experience: ‘going digital’, using technology to improve the business model and enhance the client interactions with the investment manager.

Client reporting is one facet of an ever-evolving requirement and firms need to stretch their vision and ambition accordingly. In the current operational structure within most investment management firms, one of the areas of the business that is closest to client needs and demands is the Client Reporting team.

Artificial constraints

Due to the fact that this area of the business calls itself ‘Client Reporting’, however, I believe it has become bound by the artificial constraints and limitations associated with the label. In fact, the reporting function is well positioned to expand its role and even place itself at the middle of this process of managing the entire client experience.

In recent times the client reporting label has often been replaced by ‘client communications’, but this is equally problematic since it is not really clear what this term entails – it is so broad as to be meaningless. The reality is that many of the existing vendors and business areas are still providing the same data sets in a relatively uninspiring and restrictive manner. To some extent this is due to the fact that their user community is focused on the production of the current reporting requirements, and managers of Client Reporting departments are rarely focused on future needs and market changes. It is clear to me though that the winds of change are starting to turn.

If client reporting is going to unlock anywhere near the potential that it retains, it needs to find more ambition, starting with a new way to describe itself. The terminology and language surrounding client reporting must convey themes such as client experience, digital interaction and data exchange. It needs to stop talking predominantly about process, workflow, scalability and historical data. All those elements are part of the equation, but they are limiting and lack desire.
Future pathsTo my mind, there are really two paths that client reporting can take in the future. It can become a rendering tool for historical information that is delivered on a regular basis. This will ultimately become a low value commodity that provides little opportunity for differentiation in the marketplace.

The other route is that client reporting expands its role to become the ‘data normalisation hub’ within the client interaction process. Some insightful firms are starting to explore building platforms to provide the customer with the information and experience they need. These platforms will be based upon a best of breed component architecture, to cover the array of functions required. The advantage of this approach is that as new demands and technical options emerge, they can be ‘plugged into’ the platform to keep the proposition moving forward as the market evolves.

In this environment, investment managers will look to combine the best of existing suppliers with new technologies and horizontal technical solutions already available. There is an emerging demand from some investment management firms to ‘move the needle’ in this way and become more client-centric in their business models.

Time to evolve

One might argue that client reporting is losing its way to an extent, and may be approaching the end of its shelf life in its current, traditional format. It needs to evolve, otherwise the asset managers will begin to step beyond the current providers and develop their own solutions.

Ultimately, the buyers of such software want to future-proof their investment, and if they have witnessed little notable innovation in the last ten years and an unconvincing roadmap for the future that does not account for changes in consumer behaviour, then there is a reasonable cause for concern that client needs will outstrip development.

Steve Young,
Managing Partner
Citisoft

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