AInvestment management firms are seeking ways to increase efficiency while keeping overhead costs and maintaining high margins. Cloud architecture and Software-as-a-Service (SaaS) solutions have emerged to address this need. These technologies help firms scale storage and processing power up or down based on fluctuating demand. Cloud and SaaS provide global access in a purposeful, efficient and cost-effective manner.
According to Accenture estimates, most enterprises are currently at around 20% cloud deployment. However, its recent report on The Future of Asset Management shows that most asset managers are still in the early stages of cloud migration, with just 8% indicating they have already completed their cloud journey.
Among those using cloud, 63% report improved operating efficiencies, making it the most commonly-cited benefit of cloud ahead of more flexible business models (58%), and the ability to run as an agile business and respond to changing events (57%).
With that in mind, we look at the true benefits of cloud-based SaaS solutions, and what firms should you look for in a vendor.
Top 5 benefits of SaaS solutions
See how cloud-native SaaS delivers unmatched agility, scalability and cost efficiency for investment firms.
1. Lower Total Cost of Ownership
One of the biggest benefits of SaaS is its ability to significantly reduce the total cost of ownership for investment firms. With SaaS applications already installed and running on the vendor's cloud servers, firms avoid large upfront capital expenditures for infrastructure like hardware and software licences. The pay-as-you-go subscription model facilitates a move from CapEx to OpEx, providing flexibility to scale costs up or down as needed.
SaaS also eliminates many of the ongoing expenses associated with on-premises applications—things like maintenance fees, manual upgrades, capacity planning and data centre operations. By using economies of scale from the SaaS provider's shared cloud infrastructure and resources, firms can optimise their IT spend and overall TCO. This frees up cash flow for other strategic investments while still accessing enterprise-grade solutions.
2. Time Savings
In addition to cost efficiencies, SaaS solutions lead to significant time savings for investment firms. With the software already installed in the cloud environment, implementation cycles are vastly accelerated compared to traditional on-premises deployments. Firms can be up and running with minimal time spent on installation and configuration tasks.
SaaS also alleviates the need for continuous upgrade projects and the associated downtime. New features, updates and enhancements are automatically deployed to the cloud environment, allowing firms to access the latest innovations without disruption. Configurations can be tailored to specific business needs as well.
Reducing the time and resources spent on non-strategic implementation and upgrade activities means SaaS allows firms to refocus those efforts on core competencies and deliver more value to clients and investors faster.
3. Effortless Scalability & Accessibility
With SaaS, investment firms gain seamless scalability to support business growth and expansion initiatives. The cloud infrastructure allows for easily scalable computing resources like storage, processing power and bandwidth up or down in lock-step with evolving demands. Such elasticity guarantees optimal performance without over-provisioning or resource constraints.
SaaS platforms are also designed for easy integration across an ecosystem of other cloud-based and on-premises applications using APIs and connectors. New modules and capabilities can be quickly plugged in as needed with minimal friction.
From an end-user perspective, SaaS enables secure anytime, anywhere access to software and data. New users across departments and geographies can be provisioned instantly with just an internet connection—no complex VPNs or desktop setups required.
4. Continuous Support & Updates
The burden of software maintenance and updates shifts from a firm's internal IT teams to the vendor when using SaaS. This alleviates operational staff from disruptive work like manual upgrades, patches and compatibility testing that plague traditional on-premises software deployments. SaaS providers handle all these activities behind the scenes.
Users automatically receive the latest version containing security fixes, enhancements and new features. Updates are pushed to the cloud environment, eliminating downtime and ensuring the solution stays modern and high-performing. There are no more version lock issues or technical debt to worry about.
Firms can also count on the SaaS vendor's expertise for continuous product support. Instead of maintaining specialised internal knowledge, they can use the vendor's deep platform proficiency to quickly resolve issues. This frees up valuable IT resources to focus on more strategic initiatives.
5. Business Continuity & Backup
Business continuity and data protection are intrinsic to SaaS, mitigating risks of disruption and data loss. Leading SaaS platforms use cloud infrastructure designed with redundancy and failover capabilities across multiple availability zones and regions. If an issue impacts one cloud data centre, service automatically fails over to another.
SaaS vendors also have robust backup, replication and disaster recovery processes in place that are regularly tested. Data is frequently backed up, encrypted and stored in secure off-site locations to prevent any loss. Firms avoid having to build out dedicated secondary sites and backup solutions themselves.
In the event of a datacenter outage or other disaster scenario, SaaS leads to the continuous operations with no data loss and no complex restoration processes needed by the client firm. This level of operational resiliency would be difficult and costly to achieve alone.
What to look out for with SaaS services
How to find the right SaaS provider so you have the best options going forward.
High Level of Parity
SSome vendors tend to favour one version over the other in terms of development focus, which means the SaaS version may have capabilities the on-premise version does not, and vice versa.
Your vendor should maintain 100% parity between the SaaS solution and the traditional, on-premise version to ensure complete alignment of development and upgrades across all features and capabilities, today and over the long term.
This provides your firm with a low-risk, flexible, and future-proof automation strategy should you want to bring the system on-premise in the future for any reason.
Simplified Right-Sourcing Path
What if your firm needs help managing certain aspects of its reconciliation, client fee billing, data aggregation, or other post-trade processing due to sudden staff attrition, or increased data requirements or processing volumes?
An experienced SaaS vendor capable of supporting a fast and simple transition to a managed services or “right-sourcing” option is especially valuable.
For example, Gresham's Managed Services functions as an extension of a firm’s operations team by supporting crucial yet routine data aggregation and reconciliation processes while providing a firm’s users with access to the same SaaS application to focus on true exceptions.
Summary: The future of investment operations is cloud-native
Asset managers need to reimagine their operations to be able to compete in years to come. The first step is to embrace cloud technology to reduce costs and increase agility and flexibility across their operating models. Now is the time for asset managers to reap the enormous business benefits of adopting cloud-based, SaaS solutions.
Our SaaS solutions for Reconciliation, Settlements, and Fee Billing provide a highly secure, scalable environment that can efficiently and cost-effectively support your current and future processing requirements. Contact us to learn more by starting a conversation with one of our experts.