Why many investment technologies aren’t what they seem when it comes to flexibility.

Why many investment technologies aren’t what they seem when it comes to flexibility.

Tony Mackenzie, co-founder at Jacobi discusses the limitations of investment systems in terms of flexibility, and importance of having access to an SDK to build new functionality and applications into an existing platform. He highlights the benefits of SDKs, including quicker development, lower costs, and better quality results.
Author: Jacobi – www.jacobistrategies.com

 

Many investment technologies fall short in providing sufficient flexibility, leaving in their wake a cottage industry of locally-coded end user computing solutions and in-house tools.
Why don’t investment systems have tools that allow you to extend and develop on their platforms? It’s a key question that any CIO, CTO or COO should ask of their technology vendors.
By restricting flexibility, investment managers are left with a cottage industry of locally-coded, End User Computing (EUC) solutions and in-house tools. Even the most robust ‘front-to-back-office’ system will still leave a long tail of unique processes that need to be scaled.
In any industry the decision to build or buy technology will depend on whether it can provide a competitive advantage in the market. The investment process of an asset manager is often what sets them apart. So, there are good reasons to build in-house.
Yet developing technology from the ground up is tough. Many projects end over-budget, delayed and fall short of user expectations. It’s more challenging in today’s environment as investment managers face increasing cost pressures, regulatory oversight and intense competition to attract and retain tech
talent from across industries.
But unlike a decade ago, decisions on whether to build or buy are no longer binary. Look outside of legacy investment technologies and you will find that the benefits of both in and out-sourced
approaches can be captured.
The solution is a Software Development Kit (SDK). An SDK is a package of tools that allows your own developers to build new functionality and applications into an existing platform.

The benefits of SDK’s are well-understood across industries: quicker development, lower costs, better quality results and ongoing access to new features and functions. So why don’t investment managers reap these benefits?

 

To be clear, some legacy investment technologies offer ‘developer tooling’. But too often they fall short by only supporting data flows in and out of a system.

 

Few allow you to extend on the tooling and functionality within a platform. For instance, a unique way to visualise and display data, proprietary calculation models for investment analytics, or complete applications for users to perform step-by-step actions that bring together many custom components.

 

Inflexible technology is a problem for investment managers. They need scale but also freedom to demonstrate their uniqueness. After all, if your investment process is brought together entirely using a standard system then where do you differentiate?

 

Without an SDK in their arsenal, CTOs, COOs and CIOs will remain burdened by the high costs of both extensive in-house development and rigid front-to-back-office systems. Faced with limited technology budgets and resources, an SDK allows asset managers to better prioritise and optimise their in-house efforts and ultimately do more with less. Crucially, scale can be achieved while also retaining the flexibility to demonstrate a unique investment approach.

 

About Jacobi
Jacobi was founded in 2014 with a vision to transform technology used for multi-asset portfolio design, analytics and client engagement. Jacobi provides its services to top-tier investors across the globe with a client base representing assets under management of over US$7 trillion. Its award-winning technology has its roots in institutional investment management and uniquely incorporates a market-leading software development kit. This allows firms to build their own models, tools and applications on the platform.

 

To find more information about Jacobi’s Software Development Kit, please see here.

 

Contact us at [email protected] for more information.

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