How to avoid being run over: A performance checklist for buy-side firms

Head of Global Solution Marketing & Enablement, Risk Analytics, IBM

“Even if you’re on the right track, you’ll get run over if you just sit there.” —Will Rogers

I can’t recall the first time I read this quote by American commentator Will Rogers, but I think it captures a key truth of business: in a changing marketplace, organizations need to keep moving to remain relevant to their customers. This truth is evident in the ongoing drive by IBM to reinvent and innovate over many years, particularly through periods of unprecedented change. These periods include the first automatic computing scale introduced in 1895 by the company that would later become IBM:

The first completely transistorized commercial computer—the IBM 608—introduced in 1955:

And the cognitive computing and natural language intelligence of today’s IBM Watson.

The point of this axiom is that the same can be said of today’s buy-side firms. After all, the pace of change in the financial industry is comparable to that of the technology sector, as firms face the challenges of growth and attracting clients in an era of low—even negative—interest rates, sustained volatility and intense competition. In this marketplace, what do buy-side organizations need to keep moving, to remain relevant and competitive for their clients?

Six ways to increase performance and avoid being run over

Buy-side firms have a range of options to enhance risk-aware decision making and drive growth. The following performance checklist for buy-side organizations consists of six simple questions to help determine whether your firm is keeping ahead of the fast-moving traffic, or if it is in need of a performance upgrade.

1. Increasing breadth

How well are you handling the increased complexity and breadth of asset classes—for example, alternatives such as private equity or real estate—in your search for enhanced returns in today’s low-yield, volatile market? You need to think about the efficiencies of handling multi-asset classes in a single system rather than a siloed approach.

2. Increasing need for enhanced, trusted data

How do you source the trustworthy data you need to make risk-informed decisions at predictable costs of ownership? You need to think about market data—reliable, collated, validated and enriched—from a single source, rather than multiple sources, to ensure more predictable costs.

3. Increasing due diligence

How are you coping with the increased focus of your clients on transparency and the demand for robust risk systems? You need to think about how you can demonstrate, to both existing and prospective clients, that you have an institutional risk system.

4. Increasing cost pressures

How are you handling tight profit margins as costs increase because of client and regulatory demands? You need to think about the advantages of reduced total cost of ownership (TCO) through a cloud deployment option.

5. Increasing competition

How do you protect your "secret sauce" in a cloud environment? You need to consider the benefits of adopting a hybrid approach to ensure proprietary models remain on premises, while realizing the cost efficiencies of off-loading the heavy lifting of more vanilla items to the cloud.

6. Increasing need for on-demand reporting

How do you meet the increasing demands from clients and regulators for timely, detailed reporting? You need to think about how you can deliver accurate reports at a portfolio or enterprise level.

A solution for attaining sustainable success

Today’s marketplaces are evolving at an increasingly rapid rate, and business needs to innovate to not only keep pace but stay ahead of the curve. Dr. Andrew Aziz of IBM Analytics, explores what buy-side organizations need to ensure sustainable success in the video, "IBM Algo Risk Service on Cloud." IBM Algo Risk Service on Cloud offers buy-side organizations not only advanced analytics capabilities, but also the added value of customization and the cost advantages of agile, on-cloud implementation. Combining power and sophistication with speed and flexibility—with IBM Algo Risk Service on Cloud you can avoid being run over.

Learn more about how IBM Algo Risk Service on Cloud can help your organization unlock value and drive competitive advantage.