Reflecting on the monumental efforts put into achieving T+1 this year, it’s clear that both individual and team contributions were crucial. Several months on, it’s worth pausing to appreciate our achievements and consider the lessons we’ve learned along the way.
The annual Securities Industry and Financial Markets Operations Conference (SIFMA) provided an ideal backdrop for these reflections. This year, the event attracted more than 1,200 industry figures, with over 100 speakers delving into subjects ranging from the T+1 impact and Federal Reserve decisions to the growing role of artificial intelligence and the importance of interconnected data in the investment world.
Amidst this diversity, technology’s influence stood out as a persistent theme. The financial services sector has a complicated relationship with technology—its promises to revolutionize efficiency and accessibility are undeniable, yet fulfilling these promises has proven tricky. Many digital transformation initiatives fall short, with estimates suggesting up to 70% do not meet expectations, prompting many firms to stick with familiar, albeit outdated, systems.
However, a shift may be underway. Conversations at the conference indicated that firms are beginning to accept that they’ve taken legacy systems as far as they can. While there’s comfort in the known risks these systems present, it’s increasingly evident that running a modern business on decades-old software is impractical. Both buy-side and sell-side firms are discovering they might need similar solutions, albeit with some variations.
Marcela Crossman, Senior Director of Operations – Middle Office at SS&C, remarked on her first SIFMA conference attendance: “It was eye-opening to see that many operational challenges faced by the sell-side mirror those we’ve been addressing for years on the buy-side. It’s as if they are two sides of the same coin.”
Issues like regulations, tightening margins, market fluctuations driven by uncertainty, ESG obligations, shifting customer demands, and talent retention are universal. We’re experienced in resolving them for hedge funds, private equity, mutual funds, and family offices alike.
As companies tackle these issues, streamlining processes to enhance operational efficiency remains crucial. Though technology often leads this charge, as high failure rates indicate, transformative efforts can worsen inefficiencies if technologies are poorly chosen or applied.
Marcela emphasized, “We’ve encountered many firms whose transformation projects were mishandled, leading them to question if tech alone is the panacea. For the buy-side firms we support, technology plays a role—but only when process improvements demand it.”
Companies aiming for modernization have two paths: they can uproot old software systems and replace them with cutting-edge solutions, a risky undertaking given the lengthy timelines and high failure rates, necessitating repeated updates every few years. The alternative is focusing on specific internal pain points, understanding them through the lens of business processes, and outsourcing strategically to achieve optimal outcomes.
Marcela shared insights from the conference, noting that the vendor market feels disjointed, with providers offering only partial solutions. Clients need a blend of advanced tools and comprehensive outsourcing. Increasingly, firms are turning to expert partners to craft tailored solutions, rather than limiting themselves to what individual vendors offer.
She added, “It’s promising to see firms engaging expert partners. From our long-term buy-side alliances, we know many problems can be effectively resolved with customized, efficient, and cost-effective solutions. While technology isn’t always the answer, with proper processes, it usually is.”
Despite past transformation program failures, enthusiasm abounded at the conference for modernization and the myriad ways to achieve it. Marcela highlighted, “An incremental, focused approach to transformation—rather than starting from scratch—is far more manageable and cost-effective for tackling these challenges.”
Sell-side firms can learn from their counterparts on the other side of the investment spectrum, witnessing firsthand how such strategies result in significant, actionable improvements.
For more on how SS&C’s consultative methods can help firms boost agility, scalability, and reduce operational costs, consider downloading our “Middle Office Solutions” brochure.
