FTF News spoke to Al Castillo, senior director, solutions management at SS&C Advent about Advent Outsourcing Services winning the Best Outsourcing Provider for 2017 award.
(Some financial services firms are still reluctant to hand over control of key aspects of back-office operations, says Al Castillo, senior director, solutions management at SS&C Advent, in his recent interview with FTF News. However, the scalability that the cloud provides usually wins them over. Castillo is responsible for the North American cloud delivery and managed services that are provided via AOS for the Advent Portfolio Exchange (APX) suite. His role requires him to oversee teams that are responsible for the solution and services roadmap and responsible for business development issues. SS&C Advent Outsourcing Services (AOS) was voted Best Outsourcing Provider for 2017 via the FTF News Technology Innovation Awards.)
Q: Why are most financial services firms now much more comfortable with cloud computing and outsourcing? What has changed?
A: In part it is a question of time.
Cloud technology and outsourcing services have become ever more robust and sophisticated, and they have proven their value in the marketplace.
Business imperatives have also played a role. Macro trends in investment management mean that unless firms adopt cloud solutions, outsourcing or both they may not be able to adapt fast enough to remain competitive.
Asset managers’ shifts into new markets and asset classes in the search for alpha is a classic example. Their systems may support broader asset coverage, but many times staff may not understand the variation in back-office operations associated with, for example, an international market.
Outsourcing enables firms to focus on growing their business and servicing clients, rather than scrambling to build knowledge in operations to support the new business.
The same is true on the software side. Whether it is licensing a new solution to support changing business needs or a hardware replacement cycle, firms now understand that moving to the cloud allows the business to scale more easily and reduces risk by putting system maintenance and upgrades in the vendor’s expert hands.
Q: What would you say was the most important factor that caused SS&C Advent Outsourcing Services (AOS) to be voted Best Outsourcing Provider for 2017?
A: The key has been to provide greater flexibility in how we operate and the services that we can offer to clients.
Using standard processes across our client base remains important to ensure consistency and quality of service delivery.
However, thanks to the extensive R&D we devote to broadening the capabilities of our internal tools, we are now able to vary how a specific workflow is run or when it runs, or tweak what output is created and how it is transmitted to a third party to meet a client’s specific and evolving needs.
We have also added flexibility to the menu of managed services available to clients, so the bundle they select is purpose-built for their business needs.
Q: From your vantage point, what are the top end-user outsourcing needs that have been consistent since AOS has been in existence?
A: On the technology side, firms want a high-performing, secure solution that is well monitored and maintained.
If an issue does occur, they need to know a team is in place to get back up and running as quickly as possible to minimize business disruption.
From a back-office operations perspective, a combination of factors is driving outsourcing momentum. For some firms, the goal is to improve the timing and availability of data, whether for trading or use in client meetings.
In other cases, it is about data quality and minimizing risks. Consistency in processing and eliminating manual processes are crucial.
Another common reason is that a firm may simply lack expertise in a specific area, as it continues to add new types of accounts and assets. Being able to tap a ready source of expertise can be vital in accelerating business growth and achieving success.
Q: Why is it important for AOS to offer the choice between the cloud delivery option and tailored operational services?
A: Different clients have different perspectives and requirements, so it is essential we have the flexibility to support them.
If a firm has never outsourced its systems or back office, the idea of giving up so much control at once can be tough. As a good partner, we want to work at the pace our client is comfortable with.
Need is another consideration. A firm may have a solidly-performing back-office team but doesn’t want to purchase and manage new hardware. We don’t want to disrupt a client’s business unnecessarily, so we deliver exactly the service they want when they need it.
Although roughly two-thirds of our deals in the past three years have been for cloud and operational services together, we relish the opportunity to prove the value of our service by first bringing a client on for cloud delivery of their solution. We can then add one or more operational services as the client becomes comfortable with our service team, or when their business develops that need down the road.
Q: Have you found that among your customers the move to the cloud/outsourcing has made them more open to more cutting-edge IT solutions? If so, why?
A: The cost, functionality and scalability benefits that cloud solutions and outsourcing services provider have long been apparent. But firms’ concerns around security and control typically held back adoption in the past. Those concerns have now largely been dispelled, allowing our growing user base to experience the powerful processing capabilities and scalability our solutions offer, and the enhanced user productivity they can enjoy as a result.
When clients see the benefits cloud solutions and outsourcing services bring to their firms, inevitably they become more open to extending the possibilities. Our revolutionary Advent Genesis platform is a case in point.
Genesis is a highly-scalable, cloud-based trade order creation solution that enables users to allocate capital and rebalance portfolios efficiently, manage by exception, and streamline their workflows. With Genesis, portfolio managers can manage models, rebalance accounts, manage portfolio “drift,” and adjust strategies for a large number of client accounts quickly and efficiently, at any time and from anywhere.
Thanks to the cloud, the system can be rapidly-deployed, provides maximum uptime, is almost infinitely scalable, and is proving transformative for firms as they onboard.
Q: Looking ahead, will AOS be working with any third-party providers to better meet customers’ needs?
A: We are always keen to partner with third parties that can help us deliver more value to clients and support their businesses.
One area where we do this extensively today is with our data vendor relationships. The relationships we’ve established and continue to grow with market-leading data vendors allow us to provide clients with a well-rounded, managed dataset at a predictable cost.
Q: What challenges in the financial services markets cause you the most concern?
A: Concern is not necessarily the right word, but the continuous change in the regulatory environment — both domestic and international — requires considerable ongoing investment in research, training and service development.
We spend a lot of time and resources ensuring we remain up-to-date with the changes, and that we are taking the steps to evolve our service to support all the relevant regulations.
Q: Several disruptive technologies have been emerging over the last five years. Which ones excite you? And how will they impact the offerings from AOS?
A: Crypto currencies and the underlying blockchain technology have seismic potential for the financial services industry.
However, most investment management systems are unable at present to support crypto currencies, and there is scant operational knowledge about how to manage these assets.
At SS&C Advent we can, thanks to the flexibility and sophistication built in to Geneva, our industry-leading, multi-asset portfolio management, accounting and reporting platform, which is one of the solutions available through AOS.
We already have clients using this capability, and we expect more to follow as crypto currencies or other crypto assets gain traction.