October 03, 2012

Close to half of the buy-side executives responding to a poll about portfolio accounting systems said they are not confident that their current accounting systems can support the launch of new products in a timely fashion.

The results are based on a poll conducted last month by SimCorp, a provider of investment management solutions, examining the impact of portfolio accounting systems on an investment manager's growth strategies and vulnerability to operational risks. Respondents to the poll, "Solvency at Risk: Outdated Technology Failing the Buy-Side, included 75 executives from over 50 buy-side firms across the United States and Canada.

Almost 40% of those surveyed state they cannot support all major asset classes in one accounting systems, leaving their organizations open to errors in data reconciliation, portfolio valuations, performance and exposure calculations. Yet, 63% of those polled claim they have updated their accounting systems less than five years ago, according to SimCorp.

"These poll findings have far-reaching implications," commented David Kubersky, Managing Director of SimCorp North America, in the release. "Technology is failing the buy-side. Deficiencies such as lack of multi-asset coverage in accounting platforms will erode competitive advantage for quick time-to-market of new products. Alternatively, if the back-office opts for spreadsheet workarounds, they will expose the firm to operational risks associated with reconciliation and settlement mistakes."

Respondents were also asked to describe the tasks and operations that are critical to their business but are not supported by their current accounting platforms, said the release. Answers included data visualization via dashboards, limitations in setting up new securities, derivatives processing, asset class management, trade confirmations, reporting and intraday account setup.

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