Jan 23, 2020

Overview

The firm, which has approximately USD 81 billion in AUM, is the investment manager and advisor for an insurance company and affiliates.

Over the past five years, the firm has transformed its front and middle offices through the implementation of BRS Aladdin for portfolio management, compliance, trading and risk, Eagle Pace as a data hub, eFront for alternatives, and Wall Street Office for bank loans.

With those initiatives mostly complete, the client is turning its attention to the back office, which the firm has not strategically evaluated in over a decade.

To this end, the firm enlisted Cutter Associates to review and document its existing back office environment and to assist in developing a new target state operating model. Cutter worked with the client’s investments, finance, risk, IT, and accounting groups through a series of interviews and workshops.

Cutter Solution

Working with the client, Cutter took the following steps:

  • Assessed the client’s current state by working with investment staff to identify issues and mapped out functional capabilities of the back office by organizational group.
  • Used Cutter’s proprietary capability model to review the firm’s data management capabilities in areas that included governance, architecture, stewardship, and data delivery.
  • Established that the client's core accounting platform has a diminishing client base, which introduced significant product risk.

The aging set of bespoke data storage and delivery solutions for financial reporting are tightly integrated with the accounting system and require manual effort (mostly in Excel). Decoupling the data infrastructure from the accounting system will reduce system replacement time pressure, allowing the firm to address its data management and reporting requirements as a priority.

Cutter suggested a bottom-up program approach for the client’s financial reporting architecture. Key to this design is the recognition that flexible analytics and financial reporting solutions are complementary but distinct.

Our client sponsored an additional body of work to interview insurance peers and back office vendors in support of its back office strategy and data architecture.

The client is continuing to evaluate options regarding its accounting system strategy and is moving forward with its data strategy, including updated storage and delivery architecture for analytics data, new systems for financial reporting, and enhancements to its data governance program.

Modern toolsets will provide advanced capabilities to the firm’s finance and risk teams for self-service data and business intelligence. Our client is completing this modernization of its back office to complement the foundation delivered with its new front office systems. Through an ongoing dialog with its peers and advice from Cutter’s network of subject matter experts, our client can proceed with confidence that it is following industry best practices.

Want to speak with a Cutter consultant to learn more about this topic or how we can help you? Contact us at connect@cutterassociates.com.