In the fast-moving Financial Services space, where technology is evolving rapidly, capabilities for accessing, managing and analysing data efficiently are huge priorities for firms. Modern investment management software empowers fund investor decision-making and helps them better identify portfolio risks and drive better outcomes. We discuss how the right investment management solutions can enhance portfolio risk management.
Fund investors know the market’s current volatility. Asset allocation and dynamic portfolio risk management are key to approaching this effectively. But as economic growth slows and the market battles a myriad of unforeseen challenges, investment firms need additional support to manage risk more confidently and strategically.
Some of the most glaring societal and political challenges right now include interest rate hikes, technological advances, war and terror, climate change and, of course, the aftershocks of the global pandemic. It’s nearly impossible to predict financial challenges that can impact the market and, ultimately, portfolio returns.
Another big challenge is legacy systems and processes. Long-serving colleagues can become attached to these systems and certain ways of working, and there can be resistance to change and adopting new software. But remaining on legacy systems often leads to various knock-on effects, including the following issues:
The increasing complexity of data, asset classes and regulatory rules means these legacy tools and processes are no longer adequate if you want to stay competitive.
Thankfully, there are now sophisticated portfolio management tools available that can better support fund investors and asset managers with their risk management strategy. Modern tools offer advanced monitoring and analytical capabilities to identify issues in real time, incorporate pre-defined rules and modelling, use comprehensive stress testing and align with compliance requirements. A recent report from MarketsandMarkets projected the investment and asset management system market to grow to more than 27 billion USD by 2025 (from 16.8 in 2020).
With greater regulatory pressures and more volatile market factors, firms need more sophisticated tech solutions to meet changing needs and remain competitive.
Firms still rely too much on manual data entry and management. This presented challenges around data security, accuracy and reliability. With investment management software that enables you to monitor fund performance, create accurate and timely reports, and analyse risk, your teams can make more informed decisions and have more confidence in portfolio investment suitability.
The leading software solutions can implement relevant modelling and strategic approaches for the best possible analysis and comparison. This is extremely useful for portfolio risk management and various stages and elements of the investment management lifecycle. Also, look for a platform that can integrate with all major fund databases and market data feeds and sources.
Tactical asset allocation and portfolio diversification often means that data is varied across multiple accounts. Intuitive and flexible investment management systems will enable you to consolidate all of your key data (structured and unstructured) into a digestible and configurable format, helping you to spot trends and areas of concern quickly and efficiently. Enhanced data capabilities will support the portfolio construction process to manage risk and carry out in-depth statistical analysis.
The best systems can also help you navigate risk-return performance against reliable statistics and track and analyse fund exposure. And fund investors are reaping the benefits of consolidating data into a user-friendly dashboard, to quickly view asset allocation across all investment accounts, or drill down into the data when a greater level of detail is required.
Another benefit of top investment management software is the ability to perform audited due diligence on funds, helping to maintain compliance and regulatory demands. Seek a solution that can provide extensive (and potentially 24/7) support.
AlternativeSoft’s analytical investment solutions provide the most extensive set of quantitative tools available for investment management. The platform was engineered to simplify the entire fund selection and construction process, enabling users to create personalised dashboards.
As a highly intuitive platform, it provides a wide breadth of analytics and monitoring options. Meanwhile, the solutions deliver some of the fastest data and monitoring options, with real-time market intelligence updates. Investors have so much to gain from the visibility and tracking capabilities available in the system.
Below we outlined AlternativeSoft’s top platform features that can help you transform your portfolio risk management process.
Get access to your required data surrounding trades, inflows, outflows and liquidity in one place to track your cash flow risks via our shadow accounting tool.
Rather than using multiple platforms and manually gathering all your data to effectively analyse, our software enables consolidated investment tracking. This means less time spent gathering data from multiple sources and aligning it to give the best overview, but rather everything is in one place via a dashboard, saving you precious time and effort.
Our portfolio risk management solutions enable users to create a fully customisable interface to view only the specific information, statistics and analysis that apply to your process.
Access screen collectives to help improve your decision-making by any combination of quantitative (risk, return, miscellaneous) and qualitative (asset class/type, database provider, rankings) metrics.
Asset performance monitoring allows users to monitor the KPIs that matter the most depending on the sector exposure and how that may impact portfolio risk. You can also configure the KPIs to see the performance of each investment for improved asset management.
You can screen how a fund compares to its peer group constituents on a risk-return basis and find other similar assets in terms of correlation, beta and track record.
Internal servers and manual databases are more open to cyber attacks and security breaches than cloud-based systems. We provide stringent security features and functionality to protect your data, no matter which location or device you access it from.
We’ve highlighted the main reasons to consider modern investment management solutions like AlternativeSoft to enhance your portfolio risk management process and the challenges you can overcome. Our software can also protect you against security threats, reduce errors and help you navigate this volatile market and make data-led strategic decisions.
Implementing portfolio risk management tools powered by automation should be a high priority for fund investors to manage increasing data complexity and market volatility and stay competitive. With technology changing the way we navigate investment risk, not embracing automation and modern investment software could see your firm get left behind.
Learn more about our portfolio risk management software.