Deloitte has established a joint EMEA Financial Services Asset Servicing Centre of Excellence (CoE) based in Ireland and Luxembourg.
The European asset management market has grown at a fast pace in recent years. With an uptick in cross-border distribution and a clear trend of investors opting for market diversification, asset managers increasingly choose to rely on global operating models and platforms to address the opportunities and challenges of a global economy. New regulations and disruptive technologies, such as Blockchain and Robotic Process Automation, are also adding complexity to the investment management industry and increase the stakes for asset servicers.
These trends are pushing asset managers towards further outsourcing of non-core activities so as to better manage their costs and focus on core asset management. In response to these market trends, Deloitte has established its COE, through which it has the capability to assist asset servicers in realising increased efficiencies through defining, analysing and implementing innovative disruptive technologies. The team also provides market intelligence in terms of distribution trends and local regulatory and market requirements and have supported business migration in terms of project management and migration in all aspects of asset servicing activities.
“Luxembourg and Ireland both have active financial services industries and offer a favourable environment for asset servicers. Asset managers are now outsourcing more and more of their non-core activities to asset servicers to optimise their processes and better manage their costs. By establishing a joint Centre of Excellence in Ireland and Luxembourg, we will be able to bundle our expertise in the field to better support the asset servicing sector and help these players adapt their business models to the new reality,” explains David Dalton (pictured), Partner at Deloitte Ireland and Asset Servicing Centre of Excellence Lead in Ireland.
The increase in outsourced activities represents both challenges and opportunities for asset servicers as many companies would need to adapt their business models and IT platforms to enrich their service offerings across the asset management value chain. Asset servicers provide operational solutions to middle and back office activities such as fund accounting and reporting, transaction processing and reconciliation. Competition is fierce and the complexity of fund structures – coupled with the new market infrastructure – increases the pressure on costs. This is the context for Deloitte’s renewed focus on asset servicers.
The asset servicing industry is being disrupted by a series of new technologies that enable new levels of optimisation and efficiency gains in the industry. FinTech and digital solutions such as Blockchain, RegTech, Robotic Process Automation and cognitive technology are currently changing the way asset servicers operate.
“This onward march of disruptive technology calls for a profound shift among asset servicing providers and puts technology at the forefront of providers’ strategic thinking. A certain degree of disintermediation is a likely outcome but we will also see job creations in the form of positions which do not exist in asset servicing today,” comments Benjamin Collette, Partner at Deloitte Luxembourg and the Asset Servicing Centre of Excellence Lead in Luxembourg.
With over 100 experienced professionals in Dublin and Luxembourg, the team is providing structured asset servicing services and support to clients across the EMEA region. These include financial and operational benchmarking, capital efficiency, client and service profitability, digital strategy and innovation, operating model design and transformation, traditional and alternative products solutions, and process automation.
