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Front-to-Back-Office Systems and Custody Partnerships

Aite Group has identified two approaches to front-office systems: the data exchange approach and the full-service model.

Providers of both technology and services have looked to benefit from their scalability and improve not only the breadth of their services but also the depth of integration between asset management’s IT and data architectures and those of third-party providers. This has led to the new trend of front-office or front-to-back portfolio management systems announcing “closer” partnerships with the major asset servicing players. The latest Aite Group report, Front-to-Back-Office Systems and Custody Partnerships: Who Benefits?, explores what these new partnerships and the various outsourcing models mean for buy-side institutions. 

“Technology and data integration are major differentiators across the front-to-back investment and custody life cycle,” says Paul Sinthunont, senior analyst at Aite Group. “Asset servicers seek to either have direct control of trading and portfolio management systems or establish partnerships with providers of this technology to operate directly within the client environment. This means outsourcing opportunities for asset managers extend further and become more viable in the future,” he explains. 

This report highlights the various models available for outsourcing and compares the current and future state for these models, including how technology providers and asset servicers are making their integrations, which operating models are most viable for the buy-side, and what asset managers’ operating models could look like in 10 years. It is based on Aite Group interviews conducted with the vendor community, the asset servicing community, and buy-side institutions globally between August and December 2020, and it profiles BlackRock’s Aladdin Provider, BBH’s Infomediary, Bloomberg’s Asset and Investment Manager, Societe Generale Securities Services’ CrossWise, and State Street’s Alpha.
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To request a press copy of this report or to speak with Paul Sinthunont or Vinod Jain about this topic, please contact Aite at pr@aitegroup.com.

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