It’s one thing to hear about the latest emerging technologies — but entirely another to deploy and manage them across your firm. Leaders from top asset management companies recently showed attendees of Nicsa’s GMM how it’s done, detailing their experiences with new and innovative solutions built to advance firms worldwide.
“Traditionally, we think of fintech as artificial intelligence/machine learning, blockchain, the cloud, and data — but in underlying those four concepts is a lot of orchestration that has to happen,” said Gautam Moorjani, General Manager of Intelligent Automation Solutions at SS&C. “For us, the goal is to become the largest consumer of these technologies internally — and then also provide that value to the market.”
Disruptive Technologies and the Forces Driving Their Adoption
No discussion of disruptive technology is complete without a focus on artificial intelligence, in which computers simulate human intelligence. Applications include machine learning and natural language processing, among other use cases, which significantly reduce manual labor and streamline operations.
Implementing and adopting these technologies takes time. Sanjay Balu, VP, Sr. Director of Enterprise Applications Architecture at MFS Investment Management, said his firm has been on a five-year journey in terms of disruptive technologies. To date, it’s resulted in approximately 150 unique use cases for process automation in areas including account setup, counterparty matching, verifications, and fund redemptions.
“It’s important to keep the journey in mind,” Balu said. “We started out using bots to automate repetitive tasks. Over time, you get to a point where you can use AI to make predictions,” Balu said. “It’s a process that evolves — bring your team along with you, because everyone is hesitant to use a bot, but as soon they see the differences made, they will help you move the process forward.”
The panelists said trust is an important factor in terms of propelling the asset management industry into the future in general.
“There’s been an interesting shift in regulators responding to what they think the consumers want, and as we know, our industry’s demographics are changing,” Moorjani said. “There’s going to have to be an implicit trust in technology companies to do what’s right, and I think that will drive adoption of these new technologies.”
Jim Fanning, Director, Global Financial Services Leader for North America at Amazon Web Services (AWS), agreed, pointing to a growing public understanding that organizations are often more secure when running on the cloud.
“It's generally accepted that the amount of investment dollars that cloud service providers (CSPs) are pouring into security on an annual basis is much larger than any individual firm can do on their own,” Fanning said. “Just recently, the U.S. Securities and Exchange Commission (SEC) posted a ‘Notice of No Objection’ ruling regarding the OCC’s request to use the cloud for clearing, data management, and risk management in 2025. That speaks quite a bit to the fact that cloud security is considered top-notch.”
When put into practice, cloud technology also allows firms to store the massive amounts of data and computing power required to drive artificial intelligence. Fanning said any firm looking to deploy and manage such innovations should do so via public cloud services from the start.
“Storing massive amounts of data on-premise is expensive, and it's ever-growing,” he said. “What the cloud service providers like AWS provide is essentially a utility. Just like electricity to your home — you pay for what you use when you need it. That allows data scientists to run experiments with essentially infinite computing power, and then shut them down at any point in time and stop paying for the service. It’s a much better model than buying hardware in advance and trying to predict how much you're going to need at any given time.”
Before wrapping up the event, panelists shared key takeaways they’ve learned from their digital transformation experiences so that you don’t have to:
- Don’t be fearful. “If you haven’t started the journey, start it,” Moorjani said. “If you're on the journey, accelerate it. If you think you're already accelerating it, look for the next step. Like it or not, this technology is here, and we have to grow with it through calculated and managed risk.”
- “Determine solid use cases for this technology and pursue them with an open mind,” Balu said.
- “We live in a regulated world, so make sure you have the proper detective, preventative, and responsive controls in place to satisfy regulatory requirements,” Fanning said. “That will allow organizations to move forward with comfort. Without that it's the Wild West, and we're all in trouble.”
For a full replay of this session, employees of registered firms can visit Nicsa’s 2022 General Membership Meeting website.
May contain forward-looking statements subject to various uncertainties. Personal views and observations of individuals contained herein are as of the date of the live event or written material and do not necessarily reflect the views of Nicsa or its member organizations. Nothing herein is intended to be or should be construed as legal advice. Contact your own counsel in order to obtain legal advice regarding these or any other matters. The information contained herein is for informational purposes only and does not constitute a recommendation of best practices.
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