Cloud computing for the financial industry with StatPro’s COO, Andrew Peddar
StatPro Group’s Chief Operating Officer, Andrew Peddar shares with Asia Asset Management his views on cloud computing for the financial industry.Read the transcript
Well the first thing to say is that cloud computing is a technological revolution that’s been gaining momentum for the better part of the last four or five years and in all industries around the world and companies that have embraced cloud technology are typically seeing increased efficiency, greater productivity, and enhanced transparency, but more specifically as it pertains to the clients of StatPro Revolution and StatPro in general, their seeing that lead into them being able to offer a better service to their clients as their able to offer more flexible, dynamic reporting, they can increase their sales by better articulating their investment messages to their clients, and also offer better tools should they land those prospects to become clients. Particularly as well around regulation, transparency around data is huge for clients of ours now, whether its around specific regulations or just having a better understanding of their investment book themselves, and finally also reducing costs, the ability to centralize IT, external data sources, has meant that clients can reduce their costs they’ll spend on that, as well as reduce their spend on other software vendors as they look to consolidate in the cloud.
How do regulators view cloud computing generally, and more specifically in Asia?
Well regulators around the world, particularly in the Asia-Pacific region are spending a good amount of time with their clients, understanding what cloud computing is and how those clients want to implement cloud based technology solutions in their own firms, and we at StatPro support our clients through that process, making sure we give the right answers to the right questions for the regulators so that everybody understands what is meant by cloud computing and how it pertains to the financial industry.
As the focus on risk management increases, what has this meant for your clients, especially in regard to compliance?
Well, I think the Lehman crisis and all the other crisis that followed, whether it’s Madoff, whether it’s the Libor scandals, they’re global scandals perhaps affecting certain regions in different ways at different times but fundamentally its created a lack of trust through a lack of transparency, fundamentally that was the problem with most of these crises was the lack of transparency. Really what clients are looking for is better information as to what is going on with their investments at any point at any time and really the exposure of that data to those clients’ needs to be done in a transparent way so that the investment manager can explain what they’re doing.
The other aspect that’s happened post crisis is that myself as an investor, we all have much more information at our finger tips then we ever had before, so the investment managers not only have to be transparent in their investment book of record but also be able to answer questions that the better informed investment public has become with a plethora of information that they now have at their fingertips
Well, things like UCITS & AIFMD are European type standards that people adhere to to sell their funds through the European Union and it’s becoming more and more costly for managers to meet these regulations. Fundamentally, you need a piece of software that’s going to manage the data side of it and the reporting side of it but importantly as well, is that typically have a handful of funds that are meeting such regulations. So, with StatPro Revolution we offer a per fund tariff for such regulations so if you have one UCITS fund or one AIFMD fund that you need to become compliant and sell throughout Europe then you can take StatPro Revolution at that cost without having to buy an entire system, which is what you would have to have done in a model that isn’t per portfolio.
How are your services positioned and what new trends are shaping the industry?
Well, the industry in general, globally again, is under significant pressure cost-wise and ultimately that’s because the overarching businesses are under margin pressure on their bottom line and the cost pressures in these regions, in these offices I should say, is mainly driven through layers and layers of complexity centered around technology that’s built up over the years as businesses have acquired other businesses, bought new vendors that have new databases, operating systems. It’s actually a very complex environment to which these asset managers have all their technological solutions and really what the cloud is able to do is distill all of that into a much more simpler bite-size pieces. So, at StatPro for example, we have centralized external market data sources, the IT platforms, and all the analytics platforms that clients can use into one platform in the cloud that allows for easy use and dissemination of data that reduces the costs dramatically for our clients and that is very much a global need not just one in any particular region.
Is there any danger of information overload?
Well, certainly in the modern day, we’re all overloaded by information and the financial industry is exactly the same and really it’s down to vendors such as ourselves to make sure that were producing the right information in the right shape to be given to the right people. So there’s really two parts of it from StatPro’s perspective. The first is that we build what we believe to be intent driven software and that means when a user interacts with the software, we are intelligently predicting what they may or may not want to do next and present the screens in such a way but also to make sure that the dissemination of data is done in a very structured way because our product is cloud based the access to he reports and the data is available 24/7 via an iPad, via any browser, so we want to make sure that that data that is presented to clients, to our clients, is very obvious as to why it’s being presented in such a way. So, we spend a lot of time being able to give our clients the tools to tailor that information to be given to those clients at any given point at any different time because ultimately every portfolio that’s loaded into an investment analytics platform has got a number of different stakeholders and those stakeholders want different parts of information at different points in time and our product allows for that dissemination.
What is your business strategy for the Asia-Pacific region and where do you think the best prospects for growth lie?
Well, we’re a very ambitious company that’s for sure and were very excited about being in the Asia-Pacific region. We’ve got offices in Hong Kong and Sydney as well to service those clients and really what we’re seeing in Asia-Pacific is the same as were seeing around the world, is this need for simpler more efficient investment analytics, pieces of software, and we target private wealth, hedge funds, mutual fund companies, asset managers directly to sell our services but also the fund administration and distribution platforms of those clients and the reason why we target those guys because like our clients, they need to offer better services and want to try and retain those clients, so they look to add new, better services to their platforms but also that those fund administration and distribution companies have the piece of information that we don’t have in our platform. We have all the market data sources, we have all the analytics, we have all the IT, what we don’t have is the account portfolio information, which the administrators and distributors do have.
So, by plugging into those platforms, the end hedge fund or mutual fund company can have a pure turn-key solution with StatPro revolution and more than anything the clue is in the name of our product, Revolution. We believe we’ve got a very disruptive product; it’s the only true analytics system that’s based in the cloud but the disruptiveness also comes with the business model. Investment analytics in the past has been very expensive only been able to be consumed by the larger asset managers out there. We charge on a per portfolio basis, which means if you have one mutual fund, one hedge fund and you want all the analytics we supply, you can have that for monthly fee per portfolio and that is completely disruptive and is unique in the market and one were looking forward to explore further in the Asia-Pacific region as well as globally.
Video provided courtesy of Asia Asset Management ©2014