Our clients and the market have been clear: A data-centric operating model is now the main enabler of growth, requiring a flexible and interoperable framework to keep pace with rapidly evolving market demands. Successful asset manager/asset servicer relationships will be based on flexibility, choice, relevant subject matter expertise, available technology, and data integration. The best asset servicers will continue to perform critical core functions such as safekeeping assets, striking NAVs, and running middle office functions, as well as managing important aspects of their data strategy and offering alpha-generating capabilities like capital markets products. But they will also be flexible enough to adapt alongside the clients they service.

At BBH, our approach is simple: we help clients create and integrate their own future-ready operating models made up of their best solutions, solutions provided by BBH, and those of other third parties. Our solutions are modular, open-architecture, and available to clients on their own or as a full suite. This modularity, combined with the proven integration capabilities of BBH Infomediary^®, means asset managers can integrate their front, middle, and back-office solutions by keeping what works, fixing only what doesn’t, and preserving agility and choice as the market evolves.

We believe that an asset manager’s ability to execute on their vision for the future is only as good as the service providers they partner with. With that in mind, we’d like to focus here on how we’re making inroads at helping our clients create their ideal operating model that will position their business for the future.

Data Begets Flexibility

Flexible access to data has become the goal for managers to free resources and differentiate their core business. The principles of achieving this are straightforward and well known: collect, integrate and clean data once, then reuse it throughout an organization. Enrich the data early in its lifecycle, establish clear lineage, ownership and management rules to ensure quality. Employ technology that facilitates flexible integration and downstream use.

The challenge for most asset managers is not knowing what to do, it is knowing how to do it based on their existing operating model and systems architecture. The answer is rarely another large enterprise data management solution as most managers have at least one of those already. The proliferation of “End User Computing Applications” (aka spreadsheets) are a visible symptom of a data strategy that cannot respond fast enough to users' needs. A typical operating model will also contain a variety of systems at different stages of their lifecycle. Some will be old and need to be replaced, some will work well enough but need to be enhanced, others will be new and need to be integrated and retained. Successfully navigating such complexity while keeping pace with change in a cost-effective manner is the challenge many asset managers are telling us they face today.

At BBH three important principles guide our thinking in responding to this challenge:

First, preservation of choice is important, both to address a future that is increasingly unpredictable and in recognition that each asset manager starts from a different place in their journey. No one service provider or technology will have a monopoly on good ideas so actively facilitating an open ecosystem to allow asset managers to deploy the best solutions quickly using consistent data is essential.

Second, data integration is as important as sound data management. A prerequisite of flexibility is the ability to integrate solutions and data into one logical architecture.

Finally, the ability to deliver results quickly, assess outcomes, adjust where necessary, and keep moving forward in a series of pragmatic steps driven by greatest need or benefit allows managers to demonstrate results to their business and keep budget lines open for long term transformation. The cost and effort to achieve flexible access to data cannot exceed expected value or consume resources better allocated to core competencies. Ideally, operating models account for data in a manner that provides confidence that relevant, high integrity data sets are available for whatever intended use in an efficient and cost-effective manner.

Applying the Principles of Data Integration

BBH’s contribution to providing a solution based on these principles is centered on our twenty-year heritage delivering data integration solutions with our Infomediary service. Initially conceived as a solution to help asset managers integrate post-trade data between their internal systems architecture and their external back office service providers, Infomediary has helped over 150 asset managers around the world grow their institutional businesses and launch products with specialist service providers using the same stable, flexible data interface. 

Over the course of 20 years, Infomediary has developed interfaces to the best-known industry systems (OMS, PMS, accounting, reconciliation, corporate actions, EDM etc.), industry utilities (SWIFT, DTCC, Euroclear, Clearstream, Calastone, AllFunds, etc) and a network of 5,000, service providers, distributors, brokers, utilities, and other counterparties. This connectivity and data footprint means Infomediary has been foundational to the development of our suite of modular BBH Investment Operations services as it has allowed us to layer software and operational services on top of the data we are already consuming from our clients and their providers. Furthermore, Infomediary acts as the data integration layer stitching these modules together with the other parts of an asset manager’s operating model.

Our recently launched Connector program is a logical extension of this network. BBH Connectors is a cohort of specialist third-party fintech and service providers that bring expertise in areas like ESG data, insurance accounting, class action recovery services, and AI to drive meaningful outcomes across the entirety of their operating model. BBH, in turn, provides data services that may accelerate adoption of those solutions.

Technology Alone is Not Enough

Another core lesson we’ve gleaned from providing Infomediary for 20 years is that the most successful data solutions come from combining subject matter expertise in how the data is used with technology. For instance, when a client engages with us to streamline their trade management process, the understanding we have, as an asset servicer, means we know exactly what needs to be populated in field 22F of a MT54x message to account for stamp duty. Likewise, as we expand data solutions into areas like the provision of an IBOR or the creation of data sets to support fund marketing and distribution deliverables, knowledge of the underlying fund accounting data is as important as the technology being applied. We combine modern fit for purpose technology with a high level of expertise around the relevant data to help drive client outcomes.

There is No One Size Fits All

Our recent survey of global asset managers indicated 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. 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.