Asset management as an industry, is one of the most challenging businesses across the globe, and when one adds tough customers, increasing product and service portfolio complexity, as well as stringent regulations to the mix, it becomes very demanding. As with any other business, managing expenses properly and pricing the products/services optimally is a necessity. Given the fact that even a mid-size asset management firm transacts in billions of dollars per year, a small single digit percent of increase in the revenue or decrease in expenses will surely result in a much-improved bottom line. Let us consider some of the challenges that asset management firms face today in trying to enhance their profits.
Challenges Affecting Asset Management Firms
- Customer expectations: nowadays end customers start searching for asset management schemes/products based on the fees and expense ratios that are publicly available on most websites that offer free comparisons, which automatically keeps pressure on how much you can charge lest you are deemed to be expensive without proper evaluation.
- Complex product bundling: due to a plethora of similar products available but separated by parameters like market type or asset class, end customers are now offered complex products formed by bundling of simple ones across multiple such parameters. Devising and executing a pricing model for such combined products is very difficult when one wants to expand business with newer offerings to increase revenue.
- Regulatory compliance: the demand for greater transparency in asset management processes and the ever-increasing number of regulatory reports, always keeps increasing the load on operations.
- Siloed systems: having separate stand-alone systems for operational groups differentiated by sub-verticals, customer types or even geographical regions is quite common; and it is this disconnected nature of IT & operations that is also the bane of any CFO who wants to focus on pricing and billing for the entire firm and not just few specific departments. Siloed systems result in:
- manual workarounds which are inefficient and error prone.
- multiple sources of dissimilar data which impede informed decision making.
- increased workload on customer support staff having to access multiple systems to get a complete picture of the client’s business.
Considering the scale of operations of most of the firms, it is pretty much safe to say that to overcome the issues listed above, the businesses need to use technology smartly and reduce reliance on manual processes. Let us now see how a centralized pricing & billing engine can help in taking steps in the right direction.
Key Benefits of a Modern Pricing & Billing System
All the players in the securities industry, including brokers, custodians, transfer agents, fund administrators, depositories and even exchanges face the challenges listed above and for them to stay competitive today and be prepared for tomorrow, here is how ORMB (Oracle Revenue Management & Billing), a centralized solution for pricing & billing delivers benefits.
- End-to-end automation reduces the risk of human errors drastically.
- A single instance solution enabled for multi- currency, multilingual, multi-entity operations.
- Handles large data volumes, complex distribution agreements and structures, as well as calculations and payments accurately.
- Offers an accurate and timely service fee billing.
With ORMB, firms can lower transaction costs and reduce error rates while enhancing transparency in the billing process. Since the platform is built with a single data model that brings together processes from across the business, all billing decisions are made using a single version of the truth. With ORMB, organizations can:
- Unify operations from across the business, streamline processes, and amplify end-user experiences.
- Automatically enable regulatory compliance by receiving assistance in managing expense ratios through the proper definition of products and associated rates
- Leverage pre-defined and integrated workflows that drive greater efficiency and control.
- Allow definition of complex products with multiple service quality identifiers.
- Enable stronger governance to keep up with evolving regulations while seamlessly managing price changes.
- Reduce trade expenses by allowing for centralized contract management with brokers and custodians.
- Ability to apply fee rules at any level of the customer and product hierarchy.
- Set fees, charges, and rebates on different criteria, including relationship, investment portfolio, nature of instruments, and transaction value/volume.
- Deal pricing and price execution can both exist in the same system, ensuring no revenue leakage.
How can RIA help
Many global and multinational financial services firms today leverage ORMB to streamline their billing and invoicing process and it provides unmatched flexibility in how customers are billed while facilitating greater transparency and control via detailed account statements, fee revisions updates, performance analysis, and real-time portfolio updates. However, implementing a solution like ORMB also requires the skill, experience, and efficiency of technology & domain specialists like RIA. Such technology specialists can deliver proven, pre-configured, and ready-to-use services that can accelerate the adoption of ORMB while providing all the support and guidance needed for a higher return on investment while accelerating time-to-market.
Partnering with a qualified service vendor like RIA can help in handling complex system implementations. We conduct detailed and thorough research of pain points, find innovative ways to overcome them, as well as work with diligence to accelerate the path to success. Under the guidance and support of RIA’s highly qualified and experienced revenue management and billing experts, clients can be sure to get the best in revenue lifecycle management while achieving business transformation goals with speed, ease, and financial viability.
