What are the benefits of a connected technology ecosystem for financial services firms? Capital markets and financial services firms need robust integration between systems. This integration helps them quickly get accurate and up-to-date data. This data is critical for making well-informed decisions.
What caused this shift in the industry? Anyone who’s working in and around the private markets knows that there’s more capital than ever flowing through the system.
Limited partners are putting higher percentages to work, and fund managers are delivering consistent performance. According to a McKinsey report, the net asset value of global private equity (PE) increased by 18% in 2018. Additionally, it has grown 7.5 times faster than public-market capitalization this century.
This creates ever larger managers and greater competition. Like any maturing industry, financial services firms are requiring evermore operational efficiency for these firms to keep their edge. The growth of alternative investment programs has led to a demand for them to appear more mainstream. Investors, who are accustomed to the transparency of public markets, have been expressing their needs to these managers.
These investors want to compare funds and use data to help them make decisions. The data in this market has traditionally been unclear, but they want to change that. In the past, people wanted technology for one task. Now, they want data from all their systems easily accessible when using connected technology to make decisions.
While connecting the dots of your technology ecosystem can seem like a huge project and a massive undertaking, the benefits of doing so far out-weight the costs:
1. Reduce the burden of data entry on multiple systems:
API integrations automate the process of data entry across platforms. Instead of relying on humans to manually enter data, API integrations update a single data point. This updated data is then shared across all platforms. As a result, the technology ecosystem has unified data. Intapp clients can update information about a banker or business owner in Outlook.
Intapp clients can update information about a banker or business owner in Outlook. The updated information is synced by Intapp DealCloud. This updates the firm’s data warehouse, portfolio monitoring system, and other platforms, reducing administrative work and helping firms streamline their efforts.
2. Accelerate access to specific data or lists of data:
One pain point that is commonly felt across the capital markets industry is that professionals know that data exists, but aren’t sure where. Creating a centralized place for data, especially one that allows secondary and tertiary data to be normalized, is key for financial services firms. This allows deal professionals to search for data in one place, rather than clicking and searching around multiple platforms endlessly, just to find the data and learn if it’s out of date.
3. Streamline the communication between systems and teams:
Firms can easily share information with colleagues in different functions by connecting financial services ecosystems. This is possible even if they use different software platforms. For example, if the investor relations (IR) team is using separate technology, that’s satisfactory so long as those data points are accessible to the broader organization. Without that level of access and connectivity, the firm will struggle to build meaningful institutional knowledge.
4. Establish new ways to meet compliance standards:
When a potential conflict or risky move comes up, it’s never something dealmakers are happy about. Unfortunately, though, it’s an inevitability. That is yet another reason why having technology systems that talk to each other is important. In creating these connections, it’s easier for firms to track their ability to maintain compliance because it instills adherence to processes and leaves an authoritative record of the data needed to assess risk or mitigate it.
5. Increase the value of investments made in all software:
When your firm’s software platforms are connected, they become more valuable because they are more useful. Systems that are not connected or widely used become less valuable.
To download our full guide to connecting the dots of your technology ecosystem, click here.
To listen to our recent webinar on the topic, co-hosted by the experts at IT Venture, click here.