Nearly 80 per cent of Australian-based superannuation funds and asset managers would consider using an outsourced trading solution to improve their business as firms report rising costs.
According to a survey by Northern Trust, firms are specifically looking to improve their end-to-end execution and middle office needs to deal with increased overall operating costs.
Northern Trust surveyed 100 delegates from superannuation funds and asset managers with over $2 trillion in assets under management.
Three quarters of respondents said the higher costs they were seeing were the result of compliance costs and meeting technology and staff expenses.
To deal with this, Northern Trust offers its own solution, Integrated Trading Solutions, which uses technology to create a compliance, regulatory and middle office support structure for businesses.
Gary Paulin, global head of Integrated Trading Solutions at Northern Trust Capital Markets, said: “Getting to grips with costs is a critical consideration for both asset managers and superannuation funds who are considering insourcing. The costs and risks associated with building and running a trading desk are significant. Regulators, clients and market participants are all demanding more information, greater detail, and stringent oversight and monitoring.
“To that end, Northern Trust’s Integrated Trading Solutions will help superannuation funds and asset managers drive efficiencies through a scalable and flexible operating model and ensure focus on core investment decisions.”
Angelo Calvitto, country executive- Australia, Northern Trust, said using an outsourced provider could offer ‘significant value’ by allowing funds to outsource complex processes.
“The increasing risk of non-compliance with new regulatory obligations and complexity in achieving best-execution calls for a robust compliance and regulatory framework,” he said.
“An outsourced partner for trading and execution can provide significant value by allowing funds to insource value and outsource complexity.”