BBH: “front-to-back” is an operating model, not a single solution

A recent survey from Brown Brothers Harriman (BBH) of global asset managers indicated that managers are now more focused on achieving efficiencies in the middle office than in the past, are more likely to outsource, and would prefer to knit together a panel of best of breed providers into an overall operating model rather than using a single provider. According to the survey, 62% of asset managers plan to use multiple service providers to evolve their operating model.

That allows them the opportunity to shift to a different or new vendor if a new requirement or more optimal solution emerges and delivers the benefits of diversification. This means thinking about the concept of “front to back integration” as an operating model as opposed to a single solution. But it also raises the question of how to seamlessly integrate various providers into an overall operating model and to ensure they are operating with and contributing to one single source of data that the whole enterprise can trust to make decisions and report to clients and regulators on.

“In our view, a data servicer is able to prove value when it takes on pieces of an asset manager’s data outcomes rather than trying to step in and act as an enterprise solution for the manager,” said Keith Haberlin, head of BBH Investment Operations, in an article.

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