Asset management in the cloud: A choice or a transition?

As on-premises solutions have gradually given way to hosted services, we’ve now been watching the rise of the cloud for close to 15 years. The cloud helps vendors reduce the total cost of ownership of their solutions. It provides greater operational efficiency thanks to automated, standardised deployment.

By now, most asset management firms have a policy on the use of pure Software as a Service (SaaS) platforms or cloud-hosted systems. Often, these policies are driven by concerns about costs and security. However, there are other factors to consider. For example, flexibility, open access to the workflow, and data ownership. Automation and standardisation also allow more frequent software updates. Indeed, the reduction or elimination of large upgrade projects can be a measure of a vendor’s maturity in cloud computing.

Gradually, many vendors are moving towards only providing SaaS-based systems. Does this reduce your choice? Does it restrict your firm’s ability to provide unique value and solutions to your investors? Historically, it could. SaaS locked customers into their vendor’s ecosystem.

The next question is then, can one vendor provide the same level of innovation value across all functions? Can you get everything you need in one solution? Asset managers often need flexibility. That means they should demand open solutions. Can you integrate the solution with a proprietary portfolio modelling system, a best-in-class compliance system with all your rules, or even that new disruptive start-up solution that could make the difference? Interoperability across the workflow is key – is your vendor facilitating it with open APIs or standards?

If data ownership is a concern, hybrid or client-managed cloud solutions are a good compromise. Asset managers can keep control of the data, but reduce their capital expenditure and benefit from the elastic scalability of cloud hosting.