SimCorp Dimension for the asset management industry
www.simcorp.com MITIGATE RISK
REDUCE COST
ENABLE GROWTH
Table of contents
Table of contents Mitigate risk, reduce cost and enable growth in the asset management industry
Pages 6-7
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SimCorp Dimension: a modular and scalable solution for asset managers
4
Meeting asset management industry challenges with SimCorp Dimension
6
faced by asset managers.
Mitigate risk with SimCorp Dimension
8
Pages 24-25
Mitigate risks in the investment process
8
Reliable market risk assessment
8
Learn how SimCorp Dimension meets the challenges
Manage operational risk
10
Mitigate risk with straight-through-processing
10
Mitigate counterparty risk
12
Reduce cost with SimCorp Dimension
14
Cost reduction throughout the organisation
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Crucial focus on operational costs
14
Learn about the automated workflow for daily asset
Reduce labour costs with SimCorp Dimension
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management processes provided by SimCorp Dimension.
Enable growth with SimCorp Dimension
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Pages 26-27
Create value through scalability, cost reduction and product innovation
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Value creation through innovation
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Scalability: a key ingredient to growth
21
Growth through low-cost leadership
22
SimCorp Dimension for the asset management industry
24
SimCorp: global investment management software developer of the future
Learn about SimCorp: a solid business partner committed to continuously delivering cutting-edge technology and
26
know-how for the asset management industry.
Pages 28-29
Thought leadership in investment management: SimCorp StrategyLab
28
Contact information
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Learn about SimCorp StrategyLab’s research concerning the global asset management industry.
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Mitigate risk, reduce cost and enable growth in the asset management industry
Mitigate risk, reduce cost a in the asset managemen The asset management industry is experiencing a period of unparalleled change, driven by, among other things, a need for more transparency and better reporting, an increasing list of new client demands, more rigorous regulatory controls and fundamental changes to the financial markets.
SimCorp Dimension: a modular and scalable solution for asset managers
flexibility, scalability, functionality, usability, performance
Asset managers must continuously reconcile meeting the
modular solution, helping asset managers to mitigate
challenges imposed by clients, regulators and the market
operational risk and reduce costs.
and reliability in a highly configurable and fully integrated
with the containment of operational costs and fostering an environment for growth. As a result, many asset man-
As one of the benefits of these system-wide features,
agers seek to utilise their IT investments in a more strate-
SimCorp Dimension’s high degree of scalability ensures
gic manner, with the intent to achieve superior scalability
support for a virtually limitless number of new products,
and agility for their businesses.
portfolios and client mandates, incorporating a complete range of financial instruments while minimising incremental
SimCorp Dimension is a comprehensive investment man-
costs. As a result, SimCorp Dimension allows asset man-
agement system offering asset managers unprecedented
agers to focus on their core competency, namely provid-
Mitigate risk, reduce cost and enable growth in the asset management industry
and enable growth ent industry By implementing SimCorp Dimension as the core asset management system for its London branch, DIAM International has: • increased transaction volumes by 50% with no increase in operational staffing levels; • reduced risk in the business by moving to a single system, thus avoiding disparate data sources; • eliminated the cost of maintaining several systems and the need to integrate diverse systems with one another; • implemented an asset management platform that supports the current business and is flexible enough to adapt as business and market require- ments dictate. For more details on how DIAM International and other companies have benefited from SimCorp Dimension, please visit www.simcorp.com/cases.
Want to learn more? Learn how SimCorp Dimension seamlessly ties all asset management operations into one flexible, ing alpha for their clients through automation of processes
transparent and efficient
that were previously handled on a manual basis. In addition,
workflow.
the high degree of automation, coupled with a single database that facilitates the transparency demanded by clients,
Download ‘The
positions asset managers for growth through strategies
enterprise solution
such as product innovation, low-cost leadership, geographic
for the investment
expansion, and mergers and acquisitions. In summary,
management industry’
SimCorp Dimension is designed to meet the needs of
brochure at
asset managers and provide the infrastructure to support
www.simcorp.com/
their strategic growth objectives.
brochures.
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Meeting asset management industry challenges with SimCorp Dimension
Meeting asset managem challenges with SimCorp The challenges facing the asset management industry today compel its players to seek out and leverage new tools to support their business strategies. At the executive level, it has been acknowledged that IT infrastructure must be utilised in a strategic and sustainable manner. SimCorp Dimension fully meets current and future system requirements seen in the light of these market trends. SimCorp Dimension offers solutions that are tailor-made to meet the challenges faced by the asset management industry. Discover how SimCorp Dimension helps asset managers:
Reduce costs through automation • Automated processes reduce costs related to manual errors. • Labour costs related to maintaining multiple, disparate databases and systems are eliminated.
Mitigate risk • Position data is available across all asset classes, and the same risk models can be applied to all data using the same market data and risk factors.
Enable growth through scalability and flexibility • New products and higher transaction volumes can be accommodated without a corresponding increase in costs. • Open architecture facilitates integration with any number of external data sources. • Increasingly diverse reporting requirements are easily met.
Provide transparency throughout the investment process • Transparency is maintained throughout processes concerned with counterparty exposures, fees and commissions, end-of-period calculations or valuations and the structure of investment portfolios. • An STP process for investments ensures a transparent and comprehensive workflow.
Meeting asset management industry challenges with SimCorp Dimension
ment industry Dimension
Adapt more easily to new regulations • A clearly segregated tax regulation structure means that new tax regulations or changes can easily be accommodated. • Up to ten accounting methods can be deployed per portfolio. • Reporting solutions are provided to meet any reporting requirements.
Scale the business without additional headcount • Integrated investment processing leverages product and portfolio structures throughout the enterprise, ensuring data validity and consis- tency and eliminating manual processes.
Add new products or financial instruments with ease • SimCorp’s XpressInstruments tool facilitates the addition of new instrument types quickly and efficiently.
Minimise the impact of mergers and acquisitions • Extensive enterprise-wide functionality and connectivity tools eliminate the many risks associated with IT integration or consolidation following a merger or acquisition.
Enter new geographical markets more rapidly • Extensive localisation and comprehensive support for local regulatory requirements minimise time-to-market when entering new geographical markets.
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Mitigate risk with SimCorp Dimension
Mitigate risk with SimC Recent events in the financial industry have clearly illustrated the ramifications of an incomplete or loosely enforced risk management function. As a result, investors are making much more stringent demands on the level of risk they are prepared to assume, while continuing to demand a high return on their investment. This environment forces asset managers to effectively manage the many forms of inherent risk in their business models in order to minimise the bottom line impact and at the same time ensure a high degree of stakeholder satisfaction.
Mitigate risks in the investment process
standard key ratios. In addition, SimCorp Dimension’s
In the aftermath of the global financial crisis, much more
single-database, straight-through-processing architec-
emphasis has been placed on risk mitigation in the asset
ture helps mitigate operational risk by eliminating man-
management industry. Of particular concern to many asset
ual processes and ensuring decisions are based on up-
managers are market risk, counterparty risk and the risk of
to-date and accurate data and information.
non-compliance. SimCorp Dimension is designed to help asset managers effectively and accurately assess and report
Reliable market risk assessment
these and other forms of risk to all stakeholders, including
Asset managers are often selected by their clients for
management, clients and authorities, using industry
their ability to generate low-risk ‘alpha’, making it im-
Mitigate risk with SimCorp Dimension
9
Corp Dimension
Mitigate risk in the asset management industry CHALLENGES
SIMCORP DIMENSION SOLUTIONS
Avoiding unreliable quantification of risk due to
All position data is available across asset classes and the same risk
disparate systems for position data, valuation and
models can be applied to all data, thus enabling correct and consistent
key ratio calculations
quantification of risks
Eliminating compliance breaches and errors
Fully automate reporting to clients, management and authorities,
arising from manual reporting on risk figures and
reducing the risk of compliance breaches and manual errors
level of exposure Difficulties in measuring the risk impact of
Integrated solution – a single-database system with no need for interfaces or
proposed investment decisions due to the low
duplication of data, using the same set of data throughout – minimises the
quality of enterprise data
risk of having investment decisions carried out on incorrect information
Lack of transparency caused by utilising various systems
All functionality needed for different business functions in an integrated
on disparate platforms throughout the enterprise
system creates transparency and eliminates a 'black box' risk management solution
Avoiding errors in manual workflows and
Internal and external STP processes reduce the need for manual processes
transfer of data
and consequently the number of human errors
Achieving transparency in counterparty exposures
A transparent and complete overview of the counterparty exposures in the complete range of instruments as well as in collateral management and securities lending activities
Ongoing system maintenance and keeping
Semi-annual product releases, expert support and, where possible,
the system up to date
automated upgrade, validation and testing procedures minimise the risks in ongoing system maintenance and upgrades
portant to optimise many kinds of risk-adjusted perform-
uated simultaneously. SimCorp Dimension provides this
ance figures. The ability to measure, assess, monitor and
capability.
manage market risk is therefore a critical decision tool for asset managers, who are increasingly being required to
Automated risk management
report exposure and advanced market risk measures to
SimCorp Dimension provides asset managers with real-
clients and authorities at short notice. Since market factors
time access to all position data across asset classes, along
are often correlated and results are thus not additive, a
with a broad range of market risk assessment models and
reliable statement of market risk requires a consolidated
key ratios which can be applied to any level of the portfolio
approach in which all positions and risk factors are eval-
structure and at any stage of the investment process. As a
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Mitigate risk with SimCorp Dimension
result, asset managers are able to report on a broad range
Manage operational risk
of key risk ratios based on industry standard methodologies.
A certain degree of operational risk is inherent in many of
Additionally, compliance limits can be configured to ensure
the complex processes that form the core of any asset man-
that risk levels are kept within predetermined limits, with
ager’s business, requiring an active risk management culture
automatic notification as limits are approached or exceed-
along with a number of measures designed to minimise the
ed. Furthermore, SimCorp Dimension’s risk solution calcu-
potential impact. Manual processes are, by their very na-
lates all key risk measures and ratios transparently, with a
ture, subject to human error, and decision-making based
range of customisable options, while offering stress test
on incomplete or inaccurate data can lead to incorrect
scenarios and full back-test capabilities.
investment decisions. Additionally, an asset manager’s IT infrastructure, which tends to grow in complexity over
Outsourcing and data consolidation
time, can itself become a significant source of operational
The trend towards outsourcing of back-office administra-
risk, should it not deliver validated, accurate, consolidat-
tion and other non-core business functions, while creating
ed and timely information to clients, decision-makers
the opportunity to save costs, can hinder the process of
and authorities. Furthermore, the lack of control proce-
position data consolidation across internal and external
dures can significantly increase the risk of errors or, even
systems and may lead to a so-called ‘black box’ risk man-
worse, hide the incidence of fraudulent behaviour.
agement function. SimCorp Dimension’s extended enterto consolidate all relevant data in a single, comprehensive,
Mitigate risk with straight-through-processing
enterprise-wide database and leverage the SimCorp
SimCorp Dimension’s enterprise-wide process automation,
Dimension risk solution for the timely and accurate
also known as straight-through-processing or STP, is the
calculation and reporting of risk measures and ratios,
fully automated process and data flow from front to back
regardless of the number of systems providing input.
office and back to front office, where human intervention
prise data management capabilities allow asset managers
is only required for decision-making and exception-handling
Mitigate risk with SimCorp Dimension
purposes. Further, all participants in the operation, regardless of their role in the process chain, can rely on the data being up to date and high in quality. Additionally, SimCorp Dimension is equipped with sophisticated data connectivity, communication and validation capabilities that extend the STP concept beyond internal processes and into a
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“Middle office staff are extremely happy with the risk management features they have.”
Claudio Peter Prutz, Head of IT & Operations, MEAG
multitude of external front office and back office process flows. In this way, SimCorp Dimension offers asset managers a
Mitigate operational risk with SimCorp Services
‘single version of the truth’, with the same set of data
The high degree of regulation and constantly changing
being used in investment execution by the asset manager as
market conditions necessitate a never-ending stream of
by the compliance officer, and the risk manager and all oth-
system changes for most asset managers. For over ten years,
er middle and back office functions. Having only one set of
SimCorp’s perennial guarantee has delivered and continues
data across the system significantly reduces or eliminates
to deliver two major system releases per year, ensuring asset
many of the operational risks associated with manual proc-
managers are compliant in a timely manner while delivering
esses and the traditional IT infrastructure. Finally, SimCorp
new and improved system functionality to meet changing
Dimension’s comprehensive user authorisation and control
market requirements. However, with each new release of
systems ensure that system users only have access to the da-
SimCorp Dimension, the upgrade process can present a
ta and functionality needed for their daily work. Automated
number of challenges, potentially leading to increased opera-
escalation procedures implement the so-called ‘four-eye
tional risk, opportunity costs, unforeseen costs, quality issues
principle’, ensuring that transactions that exceed a user’s au-
and delays. SimCorp’s Release and Deployment Management
thority are validated by more senior staff prior to execution,
Services offer end-to-end upgrade processes with a minimum
minimising the opportunities for non-compliant activity.
of operational risk and downtime, handling the entire project
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Mitigate risk with SimCorp Dimension
with strict planning and budget control in order to decrease
of accurate counterparty data virtually impossible, with the
overall cost while increasing quality.
potential result that the true impacts are unknown should a counterparty default.
To meet the challenges following a re-configuration or implementation of new functionality, asset managers can call on
SimCorp Dimension’s single-database architecture can
SimCorp Validation and Test Management Services, who
consolidate all position data system-wide, using the same
offer certified consultants who provide expertise as well as a
valuation models for consistency in calculations and
range of automated processes for optimal validation and test
enabling extensive credit risk management capabilities.
activities. This best-practice-based service ensures that test methods and procedures are right the first time, thus saving
The system incorporates a number of powerful key ratios,
resources and reducing the risk of and costs related to system
such as ‘Loss Given Default (LGD)’, which utilise the full
downtime. An additional benefit is the fact that test cases are
overview of all direct and indirect agreements and provide
reusable, which saves time and effort in future upgrades.
an accurate and consolidated view of counterparties.
Mitigate counterparty risk
SimCorp Dimension also incorporates extensive collateral
The default of a business partner or counterparty can, in a
management capabilities, allowing asset managers to easily
worst-case scenario, be catastrophic and at best very costly.
obtain an overview of all collateral and market positions,
The accumulated risk toward any specific counterparty,
the transactions and what has been agreed in the Credit
which can span many agreements, includes every piece of
Support Annex (CSA), e.g. the margin call conditions and
business with that organisation, ranging from equity posi-
eligible collateral.
tions in the organisation’s stock, unsettled trades and derivatives contracts with the organisation to derivatives contracts with underlying assets issued by the organisation, lending agreements, cash and security collateral, bond issues and so on. Adding to this, a complicated systems environment can make the collection and consolidation
Want to learn more? Find more information about risk management at www.simcorp.com/mitigaterisk and order the book ‘Understanding the financial crisis: investment, risk and governance’, published by SimCorp StrategyLab, at www.amazon.com or www.amazon.co.uk.
‘Understanding the financial crisis: investment, risk and governance’
‘Report on Global Investment Management Risk Survey 2009’
‘Time to rethink risk management?’
Mitigate risk with SimCorp Dimension
Integrated Investment Processing with SimCorp Dimension SimCorp Dimension allows asset management organisations to pre-define their generic investment strategies, asset allocation decisions, compliance limits and benchmarks, completely automating processes from initial asset allocation through to the actual buying or selling of individual securities. Furthermore, as new or existing clients add or change mandates, SimCorp Dimension will also automatically make certain that individual asset allocation requests and limits are applied, ensuring that the resulting trades are completely in alignment with both internal investment strategies and client requests. This unprecedented level of automation, also known as Integrated Investment Processing, offers investment management organisations the option of consolidating the resources that manage portfolios to be more in line with corporate asset management strategies, with the potential to significantly scale the business with existing headcount, or alternatively maintain business activity with significantly reduced headcount requirements and thus lower the labour cost base.
Integrated Investment Processing with SimCorp Dimension INVESTMENT PLAN
Investor
MODEL PORTFOLIO
INVESTMENT DECISION PROCESSING
Mandate 1
Asset class n
Security 1
Investment decision
Mandate 2
Asset class n
Security 2
Order
Mandate 3
Asset class n
Security 3
Pre-trade compliance
Security 4
Trade
Mandate n
Security n
OPERATIONS
Post-trade compliance
Risk
Performance
Confirmation and settlement
Accounting
Corporate actions
Reconciliation
Client and legal reporting
SimCorp Dimension’s Integrated Investment Processing allows asset managers to: • focus on core competencies, for example portfolio performance analysis, stock picking and investment management decision-making; • utilise the Integrated Investment Processing structures as the basis for structuring both risk and performance analysis, conferring significant savings in administering portfolios across the enterprise; • reduce operational errors and associated costs by providing a comprehensive overview.
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Reduce cost with SimCorp Dimension
Reduce cost with SimCor In the intense competitive environment inherent in the asset management industry, asset managers are compelled to develop new and improved products as a means to attract new clients. Coupled with this is a constant pressure on cost levels as both regulators and clients demand more stringent risk management protocols, sufficient liquidity and position coverage, and greatly increased expectations concerning transparency.
Cost reduction throughout the organisation
Crucial focus on operational costs
Cost management has become not only a necessity, but an
high quality data, which ensures that investment and other
integral part of the strategic fabric of many asset manag-
decisions are based on the best possible premise. However,
ment organisations, holding a crucial role in ensuring con-
the greater the complexity of the system environment, the
A crucial ingredient of any cost management initiative is
tinued profitability. SimCorp Dimension supports these
greater the effort required to validate, consolidate and
organisations with a range of innovative capabilities that,
reconcile data before analysis can even commence. Conse-
among other things, reduce personnel requirements,
quently, the already high cost of providing analyses can be
eliminate manual processes and minimise exception
exacerbated by errors, exception processing and unneces-
processing.
sary iterations in decision processes.
Reduce cost with SimCorp Dimension
rp Dimension Reduce cost in the asset management industry CHALLENGES
SIMCORP DIMENSION SOLUTIONS
Increasing operational cost of maintaining disparate
One integrated solution, offering enterprise-wide func-
systems for different business functions like risk manage-
tionality based on a single database reducing operational
ment, accounting, reporting etc.
costs
Growing cost of using different systems to comply
Utilising one set of data throughout the system reduces
with various local tax and accounting standards
costly duplicate manual processes and also avoids the need to train staff on multiple systems
Rising cost related to maintaining external interfaces
Minimise usage of external interfaces, thereby reducing the costs related to maintaining them
Human errors due to manual processes
Automation of labour–intensive processes reduces human errors and related costs
Additional resources required for manual
Automated reporting functionality significantly reduces
creation of reports
operational costs
Lengthy and costly software implementations
SimCorp Services offer experienced business consultants to help optimise system usage, train client staff and leverage industry best practises
Reduce operational costs with integrated investment
virtually eliminates manual processes and consequently
management software
the number of processing errors, significantly reducing
SimCorp Dimension’s straight-through-processing capabili-
staff requirements to support the business. Furthermore,
ties and single database architecture not only help to
its open architecture enables SimCorp Dimension to inte-
lower operational risk, but also to minimise operational
grate and reconcile data with other systems if and when
costs significantly. The need to validate and reconcile
needed, to achieve consistent and accurate performance
data from disparate systems is significantly reduced or
measurement as well as generate accurate client and in-
eliminated, and data accuracy can be guaranteed, thus
ternal reports.
ensuring that analysis and reporting is based on the best possible foundation. Straight-through-processing also
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Reduce cost with SimCorp Dimension
SimCorp Services help optimise processes
and efficient manner, they are unable to focus on their
SimCorp Services are provided by experienced senior
core competencies. It is an unfortunate fact that many
SimCorp business consultants who work closely with
asset managers suffer from complicated, poorly inte-
clients to understand their detailed needs and business
grated systems environments that necessitate the dupli-
parameters, and to help define new and optimise existing
cation of data and processes which tend to be labour
processes that incorporate anticipated system usage. By
intensive, manual and highly error prone.
doing so, SimCorp helps reduce operational costs by making sure the system is utilised in the best way to
Automated processes eliminate manual errors
optimise an asset manager’s workflows, for instance to
SimCorp Dimension helps asset managers significantly
process transactions and perform end-of-period portfolio
reduce costs through automation of labour intensive and
valuations. SimCorp continually expands its services offer-
manual processes. This allows staff to focus on their core
ings to incorporate new developments in both industry
competencies and the more complicated exception hand-
best practices and the semi-annual SimCorp Dimension
ling procedures. SimCorp Dimension captures data once
releases.
and then reuses it throughout the system, which reduces the costs related to manual data entry and maintaining
Reduce labour costs with SimCorp Dimension
interfaces between disparate systems.
No matter how talented the staff, if they do not have a
Additionally, SimCorp Dimension allows asset managers to
complete set of tools to support daily processes in a timely
pre-define their generic investment strategies, asset alloca-
Reduce cost with SimCorp Dimension
tion decisions, compliance limits and benchmarks, com-
Reduce labour costs with SimCorp Services
pletely automating processes from initial asset allocation
SimCorp’s Incident and Problem Management Services
through to the actual buying or selling of individual securi-
address the challenges met by SimCorp Dimension clients
ties.
regarding efficient management of one-off incidents.
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SimCorp provides certified consultants for particular events This unprecedented level of automation, also known as In-
ranging from covering the absence of a critical staff member
tegrated Investment Processing, offers investment manage-
to taking over first-level support entirely. The potential cost
ment organisations the option to consolidate the resources
savings achieved in terms of in-house overhead are clear,
that manage portfolios to be more in line with corporate
while even greater benefit derives from the wealth of
investment management strategies, with the potential to
knowledge and experience SimCorp consultants accrue
significantly scale the business using existing headcount, or
from working constantly with SimCorp Dimension opera-
alternatively to maintain business activity with significantly
tions issues.
reduced headcount requirements and consequently lower the labour cost base.
“SimCorp Dimension has allowed us to automate many routine tasks, such as producing reports. It is an extremely flexible system.” Claudio Peter Prutz, Head of IT & Operations, MEAG
Want to learn more? To gain more insight into strategic cost management, go to www.simcorp.com/reducecost and order the book ‘Operational control in asset management: processes and costs’, published by SimCorp StrategyLab, at www.amazon.com or www.amazon.co.uk.
‘Operational control in asset management: processes and costs’
‘Report on Global Investment Management Cost Survey 2009’
‘Strategic cost management with SimCorp Dimension’
18
Enable growth with SimCorp Dimension
Enable growth with Sim Asset managers can realise growth in a number of ways: through organic strategies such as product differentiation and low-cost leadership, accelerated growth strategies involving entering new geographical markets or mergers and acquisitions, or a combination of these strategies. To be successful, asset managers require an investment management system that supports expansion while minimising a corresponding increase in cost.
Create value through scalability, cost reduction and product innovation
Value creation through innovation
SimCorp Dimension is a comprehensive investment man-
also known as a differentiation strategy, focus on offering
agement system offering asset management organisations
significantly differentiated products and services to the
unprecedented flexibility, scalability, functionality, usabili-
market compared to competitors, which in turn can help
ty, performance and reliability in a highly configurable and
retain existing and attract new clients. Keys to success for
Asset managers that choose a product innovation strategy,
fully integrated modular solution and is uniquely capable
this strategy are broad instrument coverage and the ability
of supporting an asset manager’s current and future stra-
to support new and changing investment and product
tegic and tactical initiatives, facilitating years of growth.
strategies in a timely and efficient manner.
Enable growth with SimCorp Dimension
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mCorp Dimension
Enable growth in the asset management industry CHALLENGES
SIMCORP DIMENSION SOLUTIONS
Insufficient coverage of financial instruments curtails
Support for an innovation-driven growth strategy through an
product innovation
extensive coverage of financial instruments
Manual processes limit the ability to provide
Unparalleled number of automated processes and STP flows
low-cost offers to the market
that allow asset managers to significantly reduce costs related to manual errors
Managing non-standard and exotic instruments
XpressInstruments enable rapid implementation of complex and non-standardised instruments and can be included in portfolio modelling
Increasing volumes and complexity without increasing
New products, new clients and higher transaction volumes can
cost
be accommodated without a corresponding increase in cost
Complying with local requirements when entering new
New tax and accounting standards and reporting require-
markets
ments can be accommodated without additional investments in development
Maintaining a high competency level of staff when add-
SimCorp Services offers Educational Services that include Prod-
ing new instruments or entering new markets
uct Training, SimCorp Certification and End-user Training.
“The best thing is that previously any new business requirement involved “The bestadd-on thing issystem that previously any work-around, the business... Overall, we can be more another or a complicated but implementing new business requirement involvedup the whole forward-looking with theoffice system we SimCorp Dimension has opened of the front and back for us soadd-on we havesystem a lot or more flexibility in the business... another a complicated have now.” Overall, we can be more forward-looking with the system we now.” work-around, but implementing Jan have Weber, CFO, DIAM International Jan Weber, CFO, DIAM International SimCorp Dimension has opened up the whole of the front and back office for us so we have a lot more flexibility in
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Enable growth with SimCorp Dimension
SimCorp Dimension is designed for innovation
Support for complex instruments
Core to SimCorp Dimension’s effectiveness as an advanced
Many asset managers, however, have moved beyond
and flexible enterprise solution is its broad and comprehen-
standard instruments and now include structured prod-
sive instrument coverage, coverage which extends through-
ucts, exotic derivatives and hybrids in their investment
out the investment management process: front, middle
strategies. To accommodate these instruments, SimCorp
and back office. From initial contract to final maturity,
Dimension incorporates XpressInstruments, a seamlessly
SimCorp Dimension takes care of maintaining the state
integrated tool which allows support for complex and
and history of all instruments and events. In addition, all
non-standardised instruments to be added rapidly. Such
operational processes relating to instruments and events
support includes automation of operational processes,
are transparent, with information automatically available
e.g. confirmations, fixings, payments and deliveries, as
to all other business functions, such as front office analy-
well as prompts for option decisions. Therefore, positions
sis, performance measurement and cash management.
that were previously managed on spreadsheets can now
“With SimCorp Dimension’s automated, scalable STP processing and improved audit trail, I have great expectations to DnB NOR Asset Management’s corporate actions processing during future increases in business volume and activity on emerging markets.” Yngve Andersen, Head of Settlement, DnB Nor
be handled within SimCorp Dimension alongside standard exchange-traded and OTC products in a single seamless environment. The time required to implement this kind of support for a new instrument is very short, and the operational risk associated with the use of such instruments on spreadsheets or other tools outside the organisation’s core processing system is eliminated. As a single framework solution, SimCorp Dimension enables access to portfolio overview tools in one seamless front-to-back system. In addition to support for operational processes, XpressInstruments support multiple market-tested pricing and valuations models delivered by FINCAD™. More models
Enable growth with SimCorp Dimension
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are added as market requirements change and can be
os, scenarios and strategies that can be managed within
used for new and existing instruments immediately.
the system and, as a result, new portfolios and products, new tax and accounting standards, reporting requirements
Educate to enable growth
and higher transaction volumes can be accommodated
To ensure that SimCorp Dimension supports innovation in
without a corresponding increase in costs.
an optimal manner, SimCorp Services offers Educational Services that include Product Training, SimCorp Certification and End-user Training. Utilising these Educational Services will enable organisations to leverage SimCorp Dimension capabilities quickly and efficiently, thus reducing time-tomarket for new innovations, products, services and other catalysts for growth.
“We’re confident we’ll be able to adapt to changing requirements of our clients, no matter how demanding they might be.” Jan Weber, CFO, DIAM International
Scalability: a key ingredient to growth To accelerate growth, some asset managers choose to enter new markets, add additional products to the platform or enter into merger or acquisition transactions.
SimCorp Dimension is a strategic platform that can assist
The scalability of the investment management system
asset managers in the case of mergers and acquisitions.
plays an important role in these processes and can sig-
Comprehensive connectivity and communications capabili-
nificantly impact the profitability of new ventures.
ties, including data import and export, data filtering, data translation, data validation, and externally triggered online
Scalability with SimCorp Dimension
and batch processing, combine to make most integration
SimCorp Dimension enables asset managers to limit la-
tasks a configuration exercise rather than programming.
bour costs and handle additional clients while maintaining
Additionally, SimCorp Dimension’s comprehensive data
service levels. Furthermore, SimCorp Dimension is highly
model and its extensive enterprise-wide functionality
flexible with respect to the amount of holdings, portfoli-
means that consolidation of legacy systems into SimCorp
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Enable growth with SimCorp Dimension
Dimension is always an option in the short, medium or
Automate processes to achieve low-cost leadership
long term. These facilities form the basis of its robust
SimCorp Dimension provides an unparalleled number of
extended enterprise data capabilities, and SimCorp
automated processes and STP workflows that allow asset
Dimension is therefore able to meet all the demands
management companies to significantly reduce costs. The
an IT department typically faces after a merger, regard-
automated processes, with exception management as the
less of the system strategy chosen.
only manual intervention, can be applied from front office to back office, which drastically reduces the costs involved
Growth through low-cost leadership
in managing client mandates. SimCorp Dimension’s clear
Asset managers that follow a low-cost leadership strategy
and open database design means that diverse reporting re-
are constantly reviewing their operating models and look-
quirements, such as solvency reports and periodic financial
ing for opportunities to optimise the cost of production.
statements for regulators, can easily be met.
Information technology holds a central role in this strategy by eliminating error-prone manual processes, which typically offers a rapid and significant return on investment.
Enable growth with SimCorp Dimension
Want to learn more? To learn more about growth enabling strategies, visit www.simcorp.com/enablegrowth and order the book ‘Growth and value creation in asset management’, published by SimCorp StrategyLab, at www.amazon.com or www.amazon.co.uk.
‘Growth and value creation in asset management’
‘Report on Global Investment Management Growth Survey 2010’
‘Enable growth with SimCorp Dimension’
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SimCorp Dimension for the asset management industry
SimCorp Dimension for th management industry SimCorp Dimension supports the investment processing needs of the asset management industry While asset managers tend to follow a regular and predict-
adjust standard workflows and processes to meet their unique
able set of processes to satisfy stakeholder and regulatory
business needs and gain a competitive advantage. From
obligations, there are times when asset managers need to
modelling trades and placing orders, through compliance,
The fully integrated SimCorp Dimension solution automates asset management workflows
Start of period
Portfolio management
across the front, middle and back office.
Investment Corporate actions
Fund management
management strategies
Back office transactions
Benchmarking
Pre-check compliance
Reporting
Rebalancing
Trading
Orders
Asset managem
SimCorp Dimension for the asset management industry
he asset risk and performance checks and on to settlement,
SimCorp Dimension system enables asset management
accounting, reporting and connecting with external data
companies to grow and capture market share.
providers, the highly automated and fully integrated
Reconciliation control
Data quality
Valuation process
End- of-period
Matching
Market data validation
Distribution
Post-check compliance
Settlement
Fee management
Performance
Reconciliation
Tax figures
Risk analysis
Cash management
Legal reporting
End-of-period
Collateral management and securities lending
ment workflow
Management reporting
Client reporting
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SimCorp: global investment management software developer of the future
SimCorp: global investmen software developer of th Choosing an investment management platform is no trivial matter. SimCorp understands that a decision to invest in SimCorp Dimension will impact a client’s business for many years to come.
SimCorp headquarters in Copenhagen, Denmark
Introducing SimCorp
same story: working with SimCorp creates solutions
SimCorp enables global investment management organi-
that support both current and future business needs. With
sations to mitigate risk, reduce cost and enable growtht
SimCorp, clients have a reliable partner who understands
hrough development and implementation of its integrated
their organisation’s business needs and provides value-add-
and market-leading financial software solution SimCorp
ed services to their business. Long-term strategic client rela-
Dimension.
tions and a dedicated commitment to supporting clients’ business are fundamentals of the SimCorp business model.
Solid foundation Founded in 1971, SimCorp has decades of experience
Perennial guarantee
in developing solutions for the financial sector. Head-
An indispensable prerequisite for our clients’ future devel-
quartered in Denmark and with subsidiaries throughout
opment is SimCorp’s ability to develop, maintain and pro-
Europe, North America and Asia Pacific, SimCorp is list-
vide an innovative product which, by virtue of unique and
ed on NASDAQ OMX Copenhagen A/S stock exchange
timely functionality and quality, will allow our clients to
and has a continuous track record of creating value for
keep pace with an ever-changing market characterised
its clients, shareholders and employees alike.
by stricter investment management process requirements. With semi-annual releases containing new functionality,
Cutting edge
SimCorp grows with its clients and the demands of the
SimCorp’s clients include financial institutions, asset
market – and it is SimCorp’s perennial guarantee never to
managers, insurance companies, pension funds, mutual
offer its clients an outdated solution.
funds, banks and mortgage lenders, all of whom rely on SimCorp’s ability to constantly be at the cutting edge of
Superior know-how
developments in the investment management industry.
More than 1,100 enthusiastic employees worldwide are
More than 170 satisfied clients worldwide will tell the
focusing all of their efforts on a single investment man-
SimCorp: global investment management software developer of the future
1,000 EUR
nt management he future 200
SimCorp Revenue EURm Revenue
190
180 174
180 170 156
160 150 140
50 45 40 35 30 25 20 15 10 5 0
127
130
EBIT EURm Profit from operations 38 (EBIT) 34
38
40
22
2005
2006
2007
2008
2009
120 110
102
100
25
90
20
80
Development cost related to revenue in % 24.6 20.9
20.5
15
Development cost related to revenue
70 10
60 50
5
40
0
30
24.6
22.1
2005
2006
2007
2008
2009
20 10 0 2005
2006
2007
2008
2009
Development in SimCorp’s financial performance 2005–2009.
SimCorp’s financial performance, 2005-2009 agement system: SimCorp Dimension. Their core competencies are in economics, finance and IT, and serving as the strategic foundation of SimCorp’s business activities, this experience will constantly be expanded. Almost 25% of SimCorp’s revenue is re-invested in research and system development related tasks, which is our clients’ guarantee that SimCorp is relentlessly dedicated to providing truly advanced solutions and services.
Want to learn more? To learn more about SimCorp’s financial performance, download its latest annual report at www.simcorp.com/ financialreports.
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SimCorp StrategyLab
Thought leadership in inves management: SimCorp S In direct response to a new agenda in the investment management industry with increased focus on risk management, cost control and growth opportunities, SimCorp established its independent research institution, SimCorp StrategyLab, in December 2008. Through its extensive research and know-how, the institution’s aim is to provide insight into some of the many challenges facing professional asset managers throughout the world. Going forward, SimCorp StrategyLab will continue to seek to suggest ways to meet these challenges and to share best practices.
Ingo Walter, Director of SimCorp StrategyLab, is Vice Dean of Faculty and Seymour Milstein Professor at the Stern School of Business, NYU. Professor Walter has had visiting professorial appointments worldwide and remains a Visiting Professor at INSEAD in Fontainebleau, France. Professor Walter's principal areas of academic activity include international trade policy, international banking, environmental economics and economics of multinational corporate operations. To find appropriate solutions and to gather relevant best
challenges in the financial sector. The research programme
practices for the top strategic institutional levels of the
is carried out in close collaboration with internationally
investment management industry, SimCorp StrategyLab
recognised academics and established industry experts. As
carries out its own research and analysis of trends and
a result, SimCorp StrategyLab is able to provide competent
SimCorp StrategyLab
stment StrategyLab suggestions for best practices which are intended to minimise risk, find ways to achieve sustainable cost savings and enable growth.
Organisation SimCorp StrategyLab is formally organised under the
Want to learn more?
management of a board of directors. The chairman of SimCorp StrategyLab’s board is the CEO of SimCorp,
SimCorp StrategyLab conducts research that applies
Peter L. Ravn, Ph.D. SimCorp StrategyLab is headed by
to strategic levels at global asset management
the renowned Dr. Ingo Walter, Seymour Milstein Professor
companies. The research is aimed at finding ways to
at the Stern School of Business of New York University,
allow asset managers to mitigate risk, reduce cost
who is in charge of the research institution’s academic
and enable growth, with efforts focused on defining
affiliations and oversees the quality of its research work
industry best practices. For the 2010-2011 research
and related activities. Along with SimCorp StrategyLab’s
programme, a team of leading thinkers in the
partners, and building bridges between theory and prac-
academic world and the financial industry has
tice, are leading academics, industry experts and execu-
been gathered by SimCorp StrategyLab especially to
tives who contribute to its research programme and other
examine the interactions between the challenges and
activities.
best practices in the asset management industry.
Mission The mission of SimCorp StrategyLab is to contribute to identifying ways of mitigating risk, reducing cost and enabling growth in the global investment management industry.
Download the profile brochure at www.simcorpstrategylab.com to learn more about the vision and mission of SimCorp StrategyLab.
Vision The vision of SimCorp StrategyLab is to become a renowned and trusted thought leader in the investment management industry through the contribution of applicable research and knowledge in matters of strategic importance for IT and investment management.
Go to www.simcorpstrategylab.com to learn more about SimCorp StrategyLab’s research programme and activities.
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Contact information
Contact information Australia
Germany
Sweden
Sydney office:
Bad Homburg (Frankfurt) office:
Stockholm office:
+61 2 9241 4222
+49 6172 9240-0
+46 8 528 01500
Munich office: Austria
Switzerland
+49 89 306592-0
Vienna office: +43 1 5120099
Zurich office: Hong Kong
+41 44 360 5900
Hong Kong office: Belgium
Ukraine
+852 2521 2680
Brussels office: +32 2 213 3000
Kiev office: Luxembourg
+380 444 958 600
Brussels office: Canada
United Kingdom
+32 2 213 3000
New York office: +1 212 994 9400
London office: Netherlands
+44 20 7260 1900
Amsterdam office: Denmark
USA
+32 2 213 3000
Copenhagen office: +45 3544 8800 Finland
New York office: Norway
+1 212 994 9400
Oslo office:
Los Angeles office:
+47 2310 4100
+1 424 354 5151
Singapore
www.simcorp.com
Singapore office:
info@simcorp.com
Helsinki office: +358 9 685 2010 France
+65 6823 1517
Paris office: +33 1 5535 5454
Legal notice The contents of this publication are for general informa-
reproduced, stored in or introduced into a retrieval sys-
tion and illustrative purposes only and are used at the
tem, or transmitted in any form, by any means (electron-
reader’s own risk. SimCorp makes all reasonable endea-
ic, mechanical, photocopying, recording or otherwise) or
vours to ensure the accuracy of the information. Howev-
for any purpose without the express written permission
er, SimCorp does not guarantee or warrant the accuracy
of SimCorp A/S.
or completeness, factual correctness or reliability of any information in this publication and does not accept liability
SimCorp, the SimCorp logo, SimCorp Dimension and
for errors, omissions, inaccuracies or typographical errors.
SimCorp Services are either registered trademarks or
The views and opinions expressed in this publication are
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not necessarily those of SimCorp.
countries. Refer to www.simcorp.com/trademarks for a full list of SimCorp A/S trademarks. Other trademarks
Š 2010 SimCorp A/S. All rights reserved. Without limiting
referred to in this document are the property of their
rights under copyright, no part of this document may be
respective owners.
About SimCorp SimCorp enables global investment management organisations to mitigate risk, reduce cost and enable growth through development and implementation of its integrated and market-leading financial software solution SimCorp Dimension. SimCorp is headquartered in Copenhagen with subsidiaries and branches in Amsterdam, Brussels, Frankfurt, Helsinki, Hong Kong, Kiev, London, Los Angeles, Luxembourg, Munich, New York, Oslo, Paris, Singapore, Stockholm, Sydney, Toronto, Vienna and Zurich.