What to look for when choosing an investment accounting outsourcing provider

Q1: What should firms look for when choosing an investment accounting outsourcing provider? 

The goal behind outsourcing your investment accounting should not be to simply shift a problematic process from A to B and give it to somebody else. You need to know that the process you’re transitioning to is based on best practices and a solid foundation. It’s therefore essential to ensure that the underlying technology of your chosen provider is proven and robust. The new model should not be seen as just a bolt-on to your operating infrastructure. Rather, it should be a fully integrated part of a single efficient operating model that has the flexibility to support the potential growth of your outsourcing ambitions. 

When you outsource your investment accounting, while you can delegate the process, you cannot delegate the responsibility. This means that thorough due diligence on a potential provider is an absolute must. A decision cannot be based purely on cost reduction and moving FTEs; you also need to ensure that the chosen provider can be relied upon to deliver data that is validated, verified, timely and compliant.

When choosing a provider, it is imperative to ensure they have both diversity of knowledge and local representation, enabling access to a wider pool of geographic expertise than is feasible to maintain inhouse. Equally important is establishing clear SLAs and having confidence in the underlying technology.

Ultimately, you need to be confident that your provider can consistently deliver accounting data that you can depend on, i.e., validated and verified daily data and signed-off period-end accounting data within a T+1 to T+3 timescale. 

Q2: You talk about delivering signed off period-end data. How can you do this better than what can be achieved internally? 

We are delivering daily indicative accounting reporting, with fully validated and verified period-end closure between T+1 and T+3. This means that we aggregate the data from all the client’s data sources (i.e., vendor, custodian, third party manager etc.), reconcile the data, perform the accounting processes, and then review and verify the accounting figures for each of the portfolios. This end-to-end process that incorporates global coverage, timeliness and accuracy is something that many firms struggle to maintain within their own environment. 

By delivering verified end-of-period data, plus T+1 validated data, we ensure clients have daily transparency into all positions via standard reports.  

To enable true flexibility and insight, we provide 24/7 access to all data via our digital platform for self-service analysis. On top of this, our qualified accountants are available for advisory services and to provide regulatory compliant reports for each period end. 

This combination of technology, service level, and advisory resources ensures that clients can depend on SimCorp’s Investment Accounting Services for their investment accounting, enabling their internal resources to dedicate more time to value-adding activities. 

Q3: If companies are struggling to deliver this level of service either inhouse or through other outsourcing options, how is SimCorp able to maintain this?

SimCorp’s Investment Accounting Services is based on our deep expertise in investment accounting, operations and leading-edge technology. The service builds on a powerful and proven technology platform used by more than 300 clients world-wide. Our Investment Accounting Services includes:  

• SimCorp Dimension, our single integrated investment management platform that supports the full investment value chain across all assets, and delivers: 
• Proven straight-through-processing (STP) rates of over 95 percent within the accounting process 
• Support of over 70 accounting frameworks 
• Support of over 170,000 instruments 
• Our Asset Service Hub, a powerful connectivity hub providing turnkey connectivity to custodians, third party asset managers, trading venues etc., and our eco-system of partners, thereby enabling quick and standardized data-interoperability. 
• SimCorp’s fully-managed Data Service that delivers validated pricing and reference data. Deploying best practices to acquire, cleanse, enhance and distribute data, our Data Management Services team ensures that data from multiple vendors is curated and utilized as required. 
• An integrated cloud-based serviced Data Warehouse optimized for analytics and providing unlimited scale, concurrency, and performance.  
• A cloud-native, interactive Digital Portal where all the data can be accessed 24/7 and from multiple devices. This portal provides dashboards and data analytics capabilities for faster and more effective analysis of your portfolios. 

All these components mean we’re able to deliver our clients’ current requirements more efficiently and provide a level of agility and time-to-market that’s very difficult to achieve elsewhere.  

Our services team is staffed with experienced industry professionals with an average of 12 years of global and local experience within investment management. This enables us to provide a high-quality service across the globe, with a true understanding of local specificity. 

We believe this combination of leading technology and a global and local service team delivers an unrivalled service and delivers huge benefits to our clients.