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SaaS: 5 Key Reasons Why Asset Managers Choose the Cloud

SaaS: 5 Key Reasons Why Asset Managers Choose the Cloud

By Paul Chung

As investment management firms seek to increase efficiencies while keeping overhead costs low and margins high, cloud architecture and Software-as-a-Service (SaaS) solutions have emerged to purposefully, efficiently and cost-effectively scale up and down with demand to provide the storage and processing power they need on a global scale.

According to Accenture estimates, most enterprises are at around 20% cloud deployment currently. However, its recent report on The Future of Asset Management shows most asset managers are still in the early stages of cloud migration, with just 8% indicating they have already completed their cloud journey. Among those using cloud, 63% report improved operating efficiencies, making it the most commonly-cited benefit of cloud ahead of more flexible business models (58%), and the ability to run as an agile business and respond to changing events (57%).

Here is an overview of the true benefits of cloud-based SaaS solutions, and what firms should you look for in a vendor.

Top 5 Benefits of SaaS Solutions

1. Lower Total Cost of Ownership

SaaS applications are already installed on the vendor’s server which can be provisioned for a firm’s instance in the cloud. This reduces firms’ capital infrastructure expenses such as hardware and software license and maintenance costs, while offering a flexible, pay-as-you-go model.

2. Time Savings

It also accelerates and simplifies system implementation while providing configurations tailored to your firm’s specific requirements, reducing time spent on installation and configuration as well as any issues that typically get in the way of the software deployment.

3. Effortless Scalability & Accessibility

SaaS providers are well equipped to support your firm’s growth and expansion initiatives, and streamline integration with your other applications. In addition, new users can remotely and securely connect to the solution with minimal effort.

4. Continuous Support & Updates

Maintenance responsibilities are shifted from the firm’s IT or operations teams to the vendor, alleviating staff from extra work hours and downtime that might have been necessary to upgrade conventional software. Upgrades are automatic and seamless, eliminating version compatibility issues that could emerge in the future.

5. Business Continuity & Backup

SaaS solutions typically include disaster recovery backup services and business continuity measures which are tested on a regular basis. This reduces the risk of disruption and data loss due to unforeseen circumstances, as well as the need for the firm to purchase additional software or services for this purpose.

Which Vendor Should You Choose?

With cloud deployment options becoming more commonplace, it can be challenging to differentiate between solution providers. We have found two key factors to be especially crucial in determining which vendor is the right fit.

High Level of Parity

Some vendors tend to favor one version over the other in terms of development focus, which means the SaaS version may have capabilities the on-premise version does not, and vice versa. Your vendor should maintain 100% parity between the SaaS solution and the traditional, on-premise version to ensure complete alignment of development and upgrades across all features and capabilities, today and over the long term. This provides your firm with a low-risk, flexible, and future-proof automation strategy should you want to bring the system on-premise in the future for any reason.

Simplified Right-Sourcing Path

What if your firm needs help managing certain aspects of its reconciliation, client fee billing, data aggregation, or other post-trade processing due to sudden staff attrition, or increased data requirements or processing volumes? An experienced SaaS vendor capable of supporting a fast and simple transition to a managed services or “right-sourcing” option is especially valuable. For example, Electra Managed Services functions as an extension of a firm’s operations team by supporting crucial yet routine data aggregation and reconciliation processes while providing a firm’s users with access to the same SaaS application to focus on true exceptions.

Conclusion

Asset managers need to reimagine their operations to be able to compete in years to come. The first step is to embrace cloud technology to reduce costs and increase agility and flexibility across their operating models. Now is the time for asset managers to reap the enormous business benefits of adopting cloud-based, SaaS solutions.

Electra’s SaaS solutions for Reconciliation, Settlements, and Fee Billing provide a highly secure, scalable environment that can efficiently and cost-effectively support your current and future processing requirements. Contact us to learn more by starting a conversation with one of our experts.

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Paul Chung

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