CEO Comment: meeting the regulatory challenge
by CEO Peter L. Ravn
Meeting the challenge of reconciling regulatory compliance with business growth in the investment management industry today does not necessarily have to be a choice between a rock and a hard place. However, it is clear from the range of articles appearing in this issue of the Journal that current and proposed regulation is irrevocably changing the way business is done in the investment management industry.
With imposition of new and updated laws and standards, such as AIFMD, Solvency II and UCITS IV proceeding in Europe, the Dodd-Frank Act in the USA and IFRS 9 internationally, it is little wonder that many of our clients view increased regulation as the primary barrier to growth going forward. These requirements are not negotiable. They are mandatory and a prerequisite for doing business. Important for investment managers is to be able to fulfil these requirements and regard them not as a burden imposed on the industry but rather take the opposite view. This is now the framework we have to operate in and we have to see how we can best turn that framework into a competitive advantage.
We are in the situation where all key stakeholders including investors and clients demand greater transparency and strong compliance with the necessary IT infrastructure to back these up. We at SimCorp acknowledge that a strong compliance function will also become a factor of increasing competitive importance, which will define and set an organisation apart from its competition.
It all starts with a sound data foundation, a solid architecture of your investment management system and your landscape. You can never foresee exactly what changes will appear in the future but you should be able to cope with these changes much faster and much better if your foundation is in good shape.
And SimCorp Dimension, with one integrated platform and one database, ensures that all clients have the necessary consistency in their data and in their operations as a foundation for all the regulatory reporting. To help clients rise to the regulatory challenge, our constant monitoring of the regulatory scene means that SimCorp Dimension remains compliant and avoids a diversion of resources from realising growth strategies.
In an ideal world, the investment management system is there to support the business and to help the business to expand, rather than being a barrier to future growth. If the software platform is misconceived, where the fundamentals are not in place, then eventually it will become a hindrance to growth rather than an impetus to help grow the business. The regulatory changes that are coming over the next to three years not only place demands on the investment management industry in terms of the end-users like fund management companies and clients but also on the investment management software solution providers. They also need to stay on track
and keep up to date to avoid becoming a hurdle but rather support in securing competitive advantage.
It is our job at SimCorp to remain vigilant and responsive, making sure that SimCorp Dimension enables our clients’ investment management systems to stay up to date and allows them to concentrate on their core competency – delivering value for investors.
