Digital’s Impact on Front, Middle, and Back Office Operations

By: Bobby Dormanesh

The industry is experiencing the next stage in digital transformation, leveraging data to make decisions and streamline operations. Developing digital capabilities will help save time on sifting through data, protects organizations from human error, and frees up capacity so that you can focus on what is relevant to your organization. Furthermore, digital solutions can be tailored to what your organization needs, resulting in dashboards or products that are completed within a few clicks rather than hours.

Below are few ways that each part of a fund manager’s operations can benefit from digital innovation.

Front office

Portfolio risk management – Implementing a digital solution can result in a dashboard that provides a snapshot view of the underlying data that fund managers typically have to sort and summarize to get decision-ready. For funds invested in public securities, a dashboard can be built to portray the funds exposure to various sectors, while also tracking relevant information like cost and gains. Funds invested in portfolio companies can drill down on specific verticals or geographical data being reported by the underlying portfolio company, along with tracking relevant KPIs. This snapshot view gives managers a quick way to determine if their investments are still in line with the fund’s strategy and increases the opportunity to make timely adjustments.

Middle office

Client onboarding – How many time have our client relations teams gone back to the limited partner to ask them to complete a missing box in the subscription document? There is a solution for tracking subscription docs and complying with AML & KYC requirements. With the use of Digital, subscription docs can be scrubbed to ensure that they have been fully completed, verified against client restriction lists, and ensure that the investor funding account matches up with the information shared by the investor.

Back office

Fund accounting – A key product of the back office is the capital allocation spreadsheet, which is based on the waterfall stipulations in the LPA. Rather than manually creating a spreadsheet and copying formulas to the next reporting period, fund managers can input terms directly from the LPA and have allocations completed by running the tool. The digital solution provides an efficient method to completing a necessary task. 

How we can help

CLA is here to help you step into the rapidly evolving technological environment and bring digital to your organization. If you find that your team reperforms manual tasks on a regular basis, a digital assessment is a great way to determine if there is an opportunity to streamline an operation. Regardless of where you are in your digital journey, investing in your digital strategy is effective and boost efficiency.