Capital Markets Insights

Strategies for Fund Administration to Embrace Digital Transformation

Significant changes are underway in fund administration, fueled by the convergence of technological advancements and the ever-evolving expectations of investors. This journey extends beyond a mere checklist of trends; it's a compelling narrative of adaptation and innovation that fund managers must intricately weave into the fabric of their daily operations.

Once satisfied with periodic reporting, investors harbour a keen appetite for immediate insights. The private markets, evolving at an unprecedented pace, are experiencing a surge in expectations for real-time information. Fund administrators, acknowledging their pivotal role, are actively responding by reshaping the conventional approach to reporting. Traditional monthly or quarterly reporting packages give way to on-demand, detailed, and accessible information. Stakeholders now crave deeper insights into fund performance metrics, fees, and other critical data points, placing fund administrators at the forefront of meeting these expectations.

Tools for fund administration

Digital transformation, including software and platforms, has transitioned from supplementary to indispensable, delivering tools for managing funds and as conduits for effective communication with investors and sources of comprehensive reporting and analytics. This shift is more than a simple transition to digital processes; it's a purposeful embrace of technology that permeates every facet of fund administration.

Fund managers seek administrators who can adeptly navigate this landscape, streamlining fundraising, investment operations, and investor relations. Integrating investor data, investment track records, and underlying portal data is a strategic move toward unlocking actionable insights and operational efficiencies in a world that demands immediacy and accessibility.

Effective data management takes center stage as the industry leans into data-driven decision-making. It's no longer just about accumulating data; it's about having a toolset and processes to analyze and manage it effectively. Fund administrators are evolving into custodians of a wealth of information, ensuring its accuracy, accessibility, and usability to produce data-driven insights that deliver a tangible return.

Importance of cybersecurity

Alongside the adoption of technology is the growing emphasis on cybersecurity. Fund administrators must invest in robust cybersecurity measures to protect sensitive information that traverses digital platforms. Encryption, data storage, and authentication protocols must meet the highest industry standards to comply with regulations and instill confidence among investors that their data is secure.

Although artificial intelligence (AI) has only recently entered mainstream conversation with tools like ChatGPT, AI and automation have been integral forces for some time for fund administration. Robotic Process Automation (RPA) tools are no longer optional but indispensable as they streamline processes, minimize errors, and provide investors with accurate and timely information. According to a KPMG report, the potential cost-cutting benefits for financial services through RPA can be as significant as 75%.

The evolution of fund administration is marked by adaptation, innovation, and embracing transformative trends. The industry's future is in those who recognize these shifts and actively integrate them into their operational framework, ensuring resilience and relevance. At the heart of this evolution lies the instrumental role of fund management software like Katipult DealFlow. This catalyst propels the industry, providing efficiency, transparency, and security for fund administration.