Van Ta (SuisseTechPartners): Meeting the client priorities of KYC, ESG and NAV
Client on-boarding, sustainability regulation and NAV oversight have become critical issues for asset managers and servicers, says SuisseTechPartners CEO Van Ta, and they are increasingly ready to replace legacy technology with state-of-the-art systems.
What technological and functional trends are shaping the financial software industry?
Asset managers and service providers are seeking solutions to help them gather additional assets, improve service quality and meet all regulatory obligations. SuisseTechPartners’ clients and prospects tell us they need efficient tools to deploy their ESG strategy, support more complex funds and to enhance their client-reporting. Prospects are also more willing to change their legacy technology – systems built on modern architecture, like our flagship product, PMplus®, offer many advantages over those installed a decade or more ago, as those are often based on old software languages and platforms. All PMplus technology and components incorporate the most up-to-date architecture. To make an RFP shortlist for a new software solution in our industry, software must be cloud native, scalable, modular through web services, unicode/multilingual, and have a high level of built-in connectivity. Our solution offers both secure multi-tenant and stand-alone cloud solutions either from one of our partner data centre providers or a prospect’s preferred partner.
“There are still gaps and discrepancies in ESG data – receiving a torrent of information is one thing, but making it usable is another.”
How is ESG regulation impacting your clients and prospects?
The asset management industry in Europe is now entering the final phase of SFDR implementation, with the clock ticking on adoption of its regulatory technical standards in January. ESG rules impact asset managers’ processes, from product structure and marketing to portfolio management and reporting, and they are under pressure from investors, distributors and regulators worldwide. The main challenge is quality and availability of data – there are still gaps and discrepancies. Receiving a torrent of ESG data is one thing, but making it usable is another. That’s why SuisseTechPartners’ PMplus compliance module, utilises multiple ESG vendor sources alongside in-house analytics if preferred, and enables users to store, scrub and use single or multiple ESG data in the same way as any other securities master file data.
Why is client on-boarding a focus for the asset management industry?
Regulation is the key – the industry needs to maintain investors’ KYC files to comply with rules that have changed significantly over time. The Ukraine war and the consequent international sanctions underline why accurate KYC is so vital. The private equity industry has provided impetus for new solutions for on-boarding of limited partners, including exchanging documentation between the end-investor and the registrar and automated checks for potential compliance issues. We have been able to add these capabilities to PMplus, within a short development and deployment time.
Is a virtual or contingent NAV capability critical for asset managers and servicers?
Ensuring that each NAV published is correct, is the most fundamental requirement for a fund. Regulators believe mispricing of funds could represent a systemic risk and have identified best practice for timely and accurate production and checking of NAVs. But in an industry subject to cost pressure and price competition, no administrator is willing to perform the same task twice-over unless it is mandatory. Regulators are insisting that asset managers and trustees be able to calculate a contingent NAV should the primary provider fail to deliver. SuisseTechPartners has developed a range of back-up processes, from virtual NAV oversight options to a full shadow NAV calculation. The PMplus approach to enabling trustees to manage their oversight responsibilities is attracting great interest, particularly from third-party asset servicers.