Upload
simcorp
View
239
Download
4
Tags:
Embed Size (px)
DESCRIPTION
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.
Citation preview
www.simcorp.com
MITIGATE RISK REDUCE COST ENABLE GROWTH
SimCorp Dimensionfor the asset management industry
3Table of contents
Table of contents
Mitigate risk, reduce cost and enable growth in the asset management industry 4
SimCorp Dimension: a modular and scalable
solution for asset managers 4
Meeting asset management industry challenges with SimCorp Dimension 6
Mitigate risk with SimCorp Dimension 8
Mitigate risks in the investment process 8
Reliable market risk assessment 8
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 14
Crucial focus on operational costs 14
Reduce labour costs with SimCorp Dimension 16
Enable growth with SimCorp Dimension 18
Create value through scalability, cost
reduction and product innovation 18
Value creation through innovation 18
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 26
Thought leadership in investment management: SimCorp StrategyLab 28
Contact information 30
Learn how SimCorp Dimension meets the challenges
faced by asset managers.
Pages 6-7
Learn about the automated workflow for daily asset
management processes provided by SimCorp Dimension.
Pages 24-25
Learn about SimCorp: a solid business partner committed
to continuously delivering cutting-edge technology and
know-how for the asset management industry.
Pages 26-27
Learn about SimCorp StrategyLab’s research concerning
the global asset management industry.
Pages 28-29
4
Mitigate risk, reduce cost and enable growth in the asset management industry 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 f inancial markets.
SimCorp Dimension: a modular and scalable solution for asset managersAsset managers must continuously reconcile meeting the
challenges imposed by clients, regulators and the market
with the containment of operational costs and fostering
an environment for growth. As a result, many asset man-
agers seek to utilise their IT investments in a more strate-
gic manner, with the intent to achieve superior scalability
and agility for their businesses.
SimCorp Dimension is a comprehensive investment man-
agement system offering asset managers unprecedented
flexibility, scalability, functionality, usability, performance
and reliability in a highly configurable and fully integrated
modular solution, helping asset managers to mitigate
operational risk and reduce costs.
As one of the benefits of these system-wide features,
SimCorp Dimension’s high degree of scalability ensures
support for a virtually limitless number of new products,
portfolios and client mandates, incorporating a complete
range of financial instruments while minimising incremental
costs. As a result, SimCorp Dimension allows asset man-
agers to focus on their core competency, namely provid-
Mitigate risk, reduce cost and enable growth in the asset management industry
5
Mitigate risk, reduce cost and enable growth in the asset management industry
ing alpha for their clients through automation of processes
that were previously handled on a manual basis. In addition,
the high degree of automation, coupled with a single data-
base that facilitates the transparency demanded by clients,
positions asset managers for growth through strategies
such as product innovation, low-cost leadership, geographic
expansion, and mergers and acquisitions. In summary,
SimCorp Dimension is designed to meet the needs of
asset managers and provide the infrastructure to support
their strategic growth objectives.
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,
transparent and efficient
workflow.
Download ‘The
enterprise solution
for the investment
management industry’
brochure at
www.simcorp.com/
brochures.
Mitigate risk, reduce cost and enable growth in the asset management industry
6
Meeting asset management industry challenges with SimCorp Dimension
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:
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.
Reduce costs through
automation • Automated processes
reduce costs related to manual errors.
• Labour costs related to maintaining multiple, disparate databases and systems are eliminated.
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.
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.
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.
Meeting asset management industry challenges with SimCorp Dimension
7
Meeting asset management industry challenges with SimCorp 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.
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.
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.
Meeting asset management industry challenges with SimCorp Dimension
8
Mitigate risk with SimCorp Dimension 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 envi-ronment 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 In the aftermath of the global financial crisis, much more
emphasis has been placed on risk mitigation in the asset
management industry. Of particular concern to many asset
managers are market risk, counterparty risk and the risk of
non-compliance. SimCorp Dimension is designed to help
asset managers effectively and accurately assess and report
these and other forms of risk to all stakeholders, including
management, clients and authorities, using industry
standard key ratios. In addition, SimCorp Dimension’s
single-database, straight-through-processing architec-
ture helps mitigate operational risk by eliminating man-
ual processes and ensuring decisions are based on up-
to-date and accurate data and information.
Reliable market risk assessmentAsset managers are often selected by their clients for
their ability to generate low-risk ‘alpha’, making it im-
Mitigate risk with SimCorp Dimension
9
Mitigate risk with SimCorp Dimension
Mitigate risk in the asset management industryCHALLENGES SIMCORP DIMENSION SOLUTIONS
Avoiding unreliable quantification of risk due to
disparate systems for position data, valuation and
key ratio calculations
All position data is available across asset classes and the same risk
models can be applied to all data, thus enabling correct and consistent
quantification of risks
Eliminating compliance breaches and errors
arising from manual reporting on risk figures and
level of exposure
Fully automate reporting to clients, management and authorities,
reducing the risk of compliance breaches and manual errors
Difficulties in measuring the risk impact of
proposed investment decisions due to the low
quality of enterprise data
Integrated solution – a single-database system with no need for interfaces or
duplication of data, using the same set of data throughout – minimises the
risk of having investment decisions carried out on incorrect information
Lack of transparency caused by utilising various systems
on disparate platforms throughout the enterprise
All functionality needed for different business functions in an integrated
system creates transparency and eliminates a 'black box' risk management
solution
Avoiding errors in manual workflows and
transfer of data
Internal and external STP processes reduce the need for manual processes
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
the system up to date
Semi-annual product releases, expert support and, where possible,
automated upgrade, validation and testing procedures minimise the
risks in ongoing system maintenance and upgrades
portant to optimise many kinds of risk-adjusted perform-
ance figures. The ability to measure, assess, monitor and
manage market risk is therefore a critical decision tool for
asset managers, who are increasingly being required to
report exposure and advanced market risk measures to
clients and authorities at short notice. Since market factors
are often correlated and results are thus not additive, a
reliable statement of market risk requires a consolidated
approach in which all positions and risk factors are eval-
uated simultaneously. SimCorp Dimension provides this
capability.
Automated risk management
SimCorp Dimension provides asset managers with real-
time access to all position data across asset classes, along
with a broad range of market risk assessment models and
key ratios which can be applied to any level of the portfolio
structure and at any stage of the investment process. As a
Mitigate risk with SimCorp Dimension
10
result, asset managers are able to report on a broad range
of key risk ratios based on industry standard methodologies.
Additionally, compliance limits can be configured to ensure
that risk levels are kept within predetermined limits, with
automatic notification as limits are approached or exceed-
ed. Furthermore, SimCorp Dimension’s risk solution calcu-
lates all key risk measures and ratios transparently, with a
range of customisable options, while offering stress test
scenarios and full back-test capabilities.
Outsourcing and data consolidation
The trend towards outsourcing of back-office administra-
tion and other non-core business functions, while creating
the opportunity to save costs, can hinder the process of
position data consolidation across internal and external
systems and may lead to a so-called ‘black box’ risk man-
agement function. SimCorp Dimension’s extended enter-
prise data management capabilities allow asset managers
to consolidate all relevant data in a single, comprehensive,
enterprise-wide database and leverage the SimCorp
Dimension risk solution for the timely and accurate
calculation and reporting of risk measures and ratios,
regardless of the number of systems providing input.
Manage operational riskA certain degree of operational risk is inherent in many of
the complex processes that form the core of any asset man-
ager’s business, requiring an active risk management culture
along with a number of measures designed to minimise the
potential impact. Manual processes are, by their very na-
ture, subject to human error, and decision-making based
on incomplete or inaccurate data can lead to incorrect
investment decisions. Additionally, an asset manager’s IT
infrastructure, which tends to grow in complexity over
time, can itself become a significant source of operational
risk, should it not deliver validated, accurate, consolidat-
ed and timely information to clients, decision-makers
and authorities. Furthermore, the lack of control proce-
dures can significantly increase the risk of errors or, even
worse, hide the incidence of fraudulent behaviour.
Mitigate risk with straight-through-processingSimCorp Dimension’s enterprise-wide process automation,
also known as straight-through-processing or STP, is the
fully automated process and data flow from front to back
office and back to front office, where human intervention
is only required for decision-making and exception-handling
Mitigate risk with SimCorp Dimension
11
purposes. Further, all participants in the operation, regard-
less 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 connectivi-
ty, communication and validation capabilities that extend
the STP concept beyond internal processes and into a
multitude of external front office and back office process
flows.
In this way, SimCorp Dimension offers asset managers a
‘single version of the truth’, with the same set of data
being used in investment execution by the asset manager as
by the compliance officer, and the risk manager and all oth-
er middle and back office functions. Having only one set of
data across the system significantly reduces or eliminates
many of the operational risks associated with manual proc-
esses and the traditional IT infrastructure. Finally, SimCorp
Dimension’s comprehensive user authorisation and control
systems ensure that system users only have access to the da-
ta and functionality needed for their daily work. Automated
escalation procedures implement the so-called ‘four-eye
principle’, ensuring that transactions that exceed a user’s au-
thority are validated by more senior staff prior to execution,
minimising the opportunities for non-compliant activity.
Mitigate operational risk with SimCorp Services
The high degree of regulation and constantly changing
market conditions necessitate a never-ending stream of
system changes for most asset managers. For over ten years,
SimCorp’s perennial guarantee has delivered and continues
to deliver two major system releases per year, ensuring asset
managers are compliant in a timely manner while delivering
new and improved system functionality to meet changing
market requirements. However, with each new release of
SimCorp Dimension, the upgrade process can present a
number of challenges, potentially leading to increased opera-
tional risk, opportunity costs, unforeseen costs, quality issues
and delays. SimCorp’s Release and Deployment Management
Services offer end-to-end upgrade processes with a minimum
of operational risk and downtime, handling the entire project
Mitigate risk with SimCorp Dimension
“Middle off ice staff are extremely happy with the risk management features they have.” Claudio Peter Prutz, Head of IT & Operations, MEAG
12
Want to learn more?
with strict planning and budget control in order to decrease
overall cost while increasing quality.
To meet the challenges following a re-configuration or imple-
mentation of new functionality, asset managers can call on
SimCorp Validation and Test Management Services, who
offer certified consultants who provide expertise as well as a
range of automated processes for optimal validation and test
activities. This best-practice-based service ensures that test
methods and procedures are right the first time, thus saving
resources and reducing the risk of and costs related to system
downtime. An additional benefit is the fact that test cases are
reusable, which saves time and effort in future upgrades.
Mitigate counterparty riskThe default of a business partner or counterparty can, in a
worst-case scenario, be catastrophic and at best very costly.
The accumulated risk toward any specific counterparty,
which can span many agreements, includes every piece of
business with that organisation, ranging from equity posi-
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
of accurate counterparty data virtually impossible, with the
potential result that the true impacts are unknown should
a counterparty default.
SimCorp Dimension’s single-database architecture can
consolidate all position data system-wide, using the same
valuation models for consistency in calculations and
enabling extensive credit risk management capabilities.
The system incorporates a number of powerful key ratios,
such as ‘Loss Given Default (LGD)’, which utilise the full
overview of all direct and indirect agreements and provide
an accurate and consolidated view of counterparties.
SimCorp Dimension also incorporates extensive collateral
management capabilities, allowing asset managers to easily
obtain an overview of all collateral and market positions,
the transactions and what has been agreed in the Credit
Support Annex (CSA), e.g. the margin call conditions and
eligible collateral.
‘Understanding the financial crisis: investment, risk and governance’
‘Report on Global Investment Management Risk Survey 2009’
‘Time to rethink risk management?’
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.
Mitigate risk with SimCorp Dimension
13
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
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.
Mitigate risk with SimCorp Dimension
INVESTMENT PLAN
OPERATIONS
Investor Mandate 1 Asset class n Security 1
Mandate 2 Asset class n Order
Investment decision
Pre-tradecompliance
Trade
Confirmation and settlement
Corporateactions
Client and legal reporting
Accounting
ReconciliationPerformanceRiskPost-tradecompliance
Security 2
Mandate 3 Asset class n Security 3
Security 4
Security n
Mandate n
INVESTMENT DECISION PROCESSINGMODEL PORTFOLIO
14
Reduce cost with SimCorp DimensionIn 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, suff icient liquidity and position coverage, and greatly increased expectations concerning transparency.
Cost reduction throughout the organisation Cost management has become not only a necessity, but an
integral part of the strategic fabric of many asset manag-
ment organisations, holding a crucial role in ensuring con-
tinued profitability. SimCorp Dimension supports these
organisations with a range of innovative capabilities that,
among other things, reduce personnel requirements,
eliminate manual processes and minimise exception
processing.
Crucial focus on operational costsA crucial ingredient of any cost management initiative is
high quality data, which ensures that investment and other
decisions are based on the best possible premise. However,
the greater the complexity of the system environment, the
greater the effort required to validate, consolidate and
reconcile data before analysis can even commence. Conse-
quently, the already high cost of providing analyses can be
exacerbated by errors, exception processing and unneces-
sary iterations in decision processes.
Reduce cost with SimCorp Dimension
15
Reduce cost with SimCorp Dimension
Reduce operational costs with integrated investment
management software
SimCorp Dimension’s straight-through-processing capabili-
ties and single database architecture not only help to
lower operational risk, but also to minimise operational
costs significantly. The need to validate and reconcile
data from disparate systems is significantly reduced or
eliminated, and data accuracy can be guaranteed, thus
ensuring that analysis and reporting is based on the best
possible foundation. Straight-through-processing also
virtually eliminates manual processes and consequently
the number of processing errors, significantly reducing
staff requirements to support the business. Furthermore,
its open architecture enables SimCorp Dimension to inte-
grate and reconcile data with other systems if and when
needed, to achieve consistent and accurate performance
measurement as well as generate accurate client and in-
ternal reports.
Reduce cost in the asset management industry CHALLENGES SIMCORP DIMENSION SOLUTIONS
Increasing operational cost of maintaining disparate
systems for different business functions like risk manage-
ment, accounting, reporting etc.
One integrated solution, offering enterprise-wide func-
tionality based on a single database reducing operational
costs
Growing cost of using different systems to comply
with various local tax and accounting standards
Utilising one set of data throughout the system reduces
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
creation of reports
Automated reporting functionality significantly reduces
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 cost with SimCorp Dimension
16
SimCorp Services help optimise processes
SimCorp Services are provided by experienced senior
SimCorp business consultants who work closely with
clients to understand their detailed needs and business
parameters, and to help define new and optimise existing
processes that incorporate anticipated system usage. By
doing so, SimCorp helps reduce operational costs by
making sure the system is utilised in the best way to
optimise an asset manager’s workflows, for instance to
process transactions and perform end-of-period portfolio
valuations. SimCorp continually expands its services offer-
ings to incorporate new developments in both industry
best practices and the semi-annual SimCorp Dimension
releases.
Reduce labour costs with SimCorp DimensionNo matter how talented the staff, if they do not have a
complete set of tools to support daily processes in a timely
and efficient manner, they are unable to focus on their
core competencies. It is an unfortunate fact that many
asset managers suffer from complicated, poorly inte-
grated systems environments that necessitate the dupli-
cation of data and processes which tend to be labour
intensive, manual and highly error prone.
Automated processes eliminate manual errors
SimCorp Dimension helps asset managers significantly
reduce costs through automation of labour intensive and
manual processes. This allows staff to focus on their core
competencies and the more complicated exception hand-
ling procedures. SimCorp Dimension captures data once
and then reuses it throughout the system, which reduces
the costs related to manual data entry and maintaining
interfaces between disparate systems.
Additionally, SimCorp Dimension allows asset managers to
pre-define their generic investment strategies, asset alloca-
Reduce cost with SimCorp Dimension
17
Want to learn more?
Reduce labour costs with SimCorp Services
SimCorp’s Incident and Problem Management Services
address the challenges met by SimCorp Dimension clients
regarding efficient management of one-off incidents.
SimCorp provides certified consultants for particular events
ranging from covering the absence of a critical staff member
to taking over first-level support entirely. The potential cost
savings achieved in terms of in-house overhead are clear,
while even greater benefit derives from the wealth of
knowledge and experience SimCorp consultants accrue
from working constantly with SimCorp Dimension opera-
tions issues.
‘Operational control in asset management: processes and costs’
‘Report on Global Investment Management Cost Survey 2009’
‘Strategic cost management with SimCorp Dimension’
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.
Reduce cost with SimCorp Dimension
tion decisions, compliance limits and benchmarks, com-
pletely automating processes from initial asset allocation
through to the actual buying or selling of individual securi-
ties.
This unprecedented level of automation, also known as In-
tegrated Investment Processing, offers investment manage-
ment organisations the option to consolidate the resources
that manage portfolios to be more in line with corporate
investment management strategies, with the potential to
significantly scale the business using existing headcount, or
alternatively to maintain business activity with significantly
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
18
Enable growth with SimCorp DimensionAsset managers can realise growth in a number of ways: through organic strategies such as product differentiation and low-cost leadership, accelerated growth strategies invol-ving 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 innovationSimCorp Dimension is a comprehensive investment man-
agement system offering asset management organisations
unprecedented flexibility, scalability, functionality, usabili-
ty, performance and reliability in a highly configurable and
fully integrated modular solution and is uniquely capable
of supporting an asset manager’s current and future stra-
tegic and tactical initiatives, facilitating years of growth.
Value creation through innovationAsset managers that choose a product innovation strategy,
also known as a differentiation strategy, focus on offering
significantly differentiated products and services to the
market compared to competitors, which in turn can help
retain existing and attract new clients. Keys to success for
this strategy are broad instrument coverage and the ability
to support new and changing investment and product
strategies in a timely and efficient manner.
Enable growth with SimCorp Dimension
19
Enable growth with SimCorp Dimension
Enable growth in the asset management industry
CHALLENGES SIMCORP DIMENSION SOLUTIONS
Insufficient coverage of financial instruments curtails
product innovation
Support for an innovation-driven growth strategy through an
extensive coverage of financial instruments
Manual processes limit the ability to provide
low-cost offers to the market
Unparalleled number of automated processes and STP flows
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
cost
New products, new clients and higher transaction volumes can
be accommodated without a corresponding increase in cost
Complying with local requirements when entering new
markets
New tax and accounting standards and reporting require-
ments can be accommodated without additional investments
in development
Maintaining a high competency level of staff when add-
ing new instruments or entering new markets
SimCorp Services offers Educational Services that include Prod-
uct Training, SimCorp Certification and End-user Training.
“The best thing is that previously any new business requirement involved another add-on system or a complicated work-around, but implementing SimCorp Dimension has opened up the whole of the front and back off ice for us so we have a lot more flexibility in
the business... Overall, we can be more forward-looking with the system we have now.”Jan Weber, CFO, DIAM International
Enable growth with SimCorp Dimension
“The best thing is that previously any new business requirement involved another add-on system or a complicated work-around, but implementing SimCorp Dimension has opened up the whole of the front and back off ice for us so we have a lot more flexibility in the business... Overall, we can be more forward-looking with the system we have now.”Jan Weber, CFO, DIAM International
20
SimCorp Dimension is designed for innovation
Core to SimCorp Dimension’s effectiveness as an advanced
and flexible enterprise solution is its broad and comprehen-
sive instrument coverage, coverage which extends through-
out the investment management process: front, middle
and back office. From initial contract to final maturity,
SimCorp Dimension takes care of maintaining the state
and history of all instruments and events. In addition, all
operational processes relating to instruments and events
are transparent, with information automatically available
to all other business functions, such as front office analy-
sis, performance measurement and cash management.
“With SimCorp Dimension’s auto-mated, 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
Support for complex instruments
Many asset managers, however, have moved beyond
standard instruments and now include structured prod-
ucts, exotic derivatives and hybrids in their investment
strategies. To accommodate these instruments, SimCorp
Dimension incorporates XpressInstruments, a seamlessly
integrated tool which allows support for complex and
non-standardised instruments to be added rapidly. Such
support includes automation of operational processes,
e.g. confirmations, fixings, payments and deliveries, as
well as prompts for option decisions. Therefore, positions
that were previously managed on spreadsheets can now
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 spread-
sheets or other tools outside the organisation’s core pro-
cessing system is eliminated. As a single framework solu-
tion, SimCorp Dimension enables access to portfolio
overview tools in one seamless front-to-back system. In
addition to support for operational processes, XpressIn-
struments support multiple market-tested pricing and
valuations models delivered by FINCAD™. More models
Enable growth with SimCorp Dimension
21
are added as market requirements change and can be
used for new and existing instruments immediately.
Educate to enable growth
To ensure that SimCorp Dimension supports innovation in
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-to-
market for new innovations, products, services and other
catalysts for growth.
Scalability: a key ingredient to growthTo accelerate growth, some asset managers choose to
enter new markets, add additional products to the plat-
form or enter into merger or acquisition transactions.
The scalability of the investment management system
plays an important role in these processes and can sig-
nificantly impact the profitability of new ventures.
Scalability with SimCorp Dimension
SimCorp Dimension enables asset managers to limit la-
bour costs and handle additional clients while maintaining
service levels. Furthermore, SimCorp Dimension is highly
flexible with respect to the amount of holdings, portfoli-
os, scenarios and strategies that can be managed within
the system and, as a result, new portfolios and products,
new tax and accounting standards, reporting requirements
and higher transaction volumes can be accommodated
without a corresponding increase in costs.
“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
SimCorp Dimension is a strategic platform that can assist
asset managers in the case of mergers and acquisitions.
Comprehensive connectivity and communications capabili-
ties, including data import and export, data filtering, data
translation, data validation, and externally triggered online
and batch processing, combine to make most integration
tasks a configuration exercise rather than programming.
Additionally, SimCorp Dimension’s comprehensive data
model and its extensive enterprise-wide functionality
means that consolidation of legacy systems into SimCorp
Enable growth with SimCorp Dimension
22
Dimension is always an option in the short, medium or
long term. These facilities form the basis of its robust
extended enterprise data capabilities, and SimCorp
Dimension is therefore able to meet all the demands
an IT department typically faces after a merger, regard-
less of the system strategy chosen.
Growth through low-cost leadershipAsset managers that follow a low-cost leadership strategy
are constantly reviewing their operating models and look-
ing for opportunities to optimise the cost of production.
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.
Automate processes to achieve low-cost leadership
SimCorp Dimension provides an unparalleled number of
automated processes and STP workflows that allow asset
management companies to significantly reduce costs. The
automated processes, with exception management as the
only manual intervention, can be applied from front office
to back office, which drastically reduces the costs involved
in managing client mandates. SimCorp Dimension’s clear
and open database design means that diverse reporting re-
quirements, such as solvency reports and periodic financial
statements for regulators, can easily be met.
Enable growth with SimCorp Dimension
23Enable 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.
‘Report on Global Investment Management Growth Survey 2010’
‘Enable growth with SimCorp Dimension’
‘Growth and value creation in asset management’
24
SimCorp Dimension supports the investment processing needs of the asset management industry
SimCorp Dimension for the asset management industry
Portfolio management
Fund management
Pre-check compliance
Investment
management
strategies
Start of period
Corporate actions
Back office transactions
Reporting Trading
Benchmarking
Rebalancing
Orders
Asset management workflow
The fully integrated SimCorp
Dimension solution automates
asset management workflows
across the front, middle and
back office.
SimCorp Dimension for the asset management industry
While asset managers tend to follow a regular and predict-
able set of processes to satisfy stakeholder and regulatory
obligations, there are times when asset managers need to
adjust standard workflows and processes to meet their unique
business needs and gain a competitive advantage. From
modelling trades and placing orders, through compliance,
25
SimCorp Dimension for the asset management industry
Data qualityReconciliation control
Valuation process End- of-period
Matching Distribution Post-check complianceMarket data validation
Settlement Performance
Reconciliation
Fee management
Risk analysis
Cash management
Tax figures
End-of-period
Collateral management and
securities lending
Legal reporting
Management reporting
Client reporting
Asset management workflow
SimCorp Dimension for the asset management industry
risk and performance checks and on to settlement,
accounting, reporting and connecting with external data
providers, the highly automated and fully integrated
SimCorp Dimension system enables asset management
companies to grow and capture market share.
26 SimCorp: global investment management software developer of the future
SimCorp: global investment management software developer of the futureChoosing 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.
Introducing SimCorpSimCorp enables global investment management organi-
sations to mitigate risk, reduce cost and enable growtht
hrough development and implementation of its integrated
and market-leading financial software solution SimCorp
Dimension.
Solid foundation Founded in 1971, SimCorp has decades of experience
in developing solutions for the financial sector. Head-
quartered in Denmark and with subsidiaries throughout
Europe, North America and Asia Pacific, SimCorp is list-
ed on NASDAQ OMX Copenhagen A/S stock exchange
and has a continuous track record of creating value for
its clients, shareholders and employees alike.
Cutting edge SimCorp’s clients include financial institutions, asset
managers, insurance companies, pension funds, mutual
funds, banks and mortgage lenders, all of whom rely on
SimCorp’s ability to constantly be at the cutting edge of
developments in the investment management industry.
More than 170 satisfied clients worldwide will tell the
same story: working with SimCorp creates solutions
that support both current and future business needs. With
SimCorp, clients have a reliable partner who understands
their organisation’s business needs and provides value-add-
ed services to their business. Long-term strategic client rela-
tions and a dedicated commitment to supporting clients’
business are fundamentals of the SimCorp business model.
Perennial guarantee An indispensable prerequisite for our clients’ future devel-
opment is SimCorp’s ability to develop, maintain and pro-
vide an innovative product which, by virtue of unique and
timely functionality and quality, will allow our clients to
keep pace with an ever-changing market characterised
by stricter investment management process requirements.
With semi-annual releases containing new functionality,
SimCorp grows with its clients and the demands of the
market – and it is SimCorp’s perennial guarantee never to
offer its clients an outdated solution.
Superior know-how More than 1,100 enthusiastic employees worldwide are
focusing all of their efforts on a single investment man-
SimCorp headquarters in Copenhagen, Denmark
27
Want to learn more?
To learn more about
SimCorp’s financial
performance, download
its latest annual report
at www.simcorp.com/
financialreports.
SimCorp: global investment management software developer of the future
SimCorp: global investment management software developer of the future
agement system: SimCorp Dimension. Their core compe-
tencies 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 sys-
tem development related tasks, which is our clients’ guar-
antee that SimCorp is relentlessly dedicated to providing
truly advanced solutions and services.
0
100
110
120
130
140
150
160
170
180
Revenue190
200
1,00
0 EU
R
50
50
45
40
35
30
25
20
15
22
3438
40
10
5
0
90
40
80
30
70
20
60
10
2005 2006 2007 2009
2005 2006 2007 2009
102
127
156
180
2008
174
SimCorp Revenue EURm EBIT EURm
Development cost related to revenue in %
38
2008
Profit from operations
(EBIT)
2005
Development costrelated to revenue
2006 2007 20092008
0
25
10
20
5
15
20.9 20.522.1
24.6 24.6
Development in SimCorp’s financial performance 2005–2009.
SimCorp’s financial performance, 2005-2009
28
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.
SimCorp StrategyLab
Thought leadership in investment management: SimCorp StrategyLabIn 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.
To find appropriate solutions and to gather relevant best
practices for the top strategic institutional levels of the
investment management industry, SimCorp StrategyLab
carries out its own research and analysis of trends and
challenges in the financial sector. The research programme
is carried out in close collaboration with internationally
recognised academics and established industry experts. As
a result, SimCorp StrategyLab is able to provide competent
29
Want to learn more?
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.
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.
SimCorp StrategyLab conducts research that applies
to strategic levels at global asset management
companies. The research is aimed at finding ways to
allow asset managers to mitigate risk, reduce cost
and enable growth, with efforts focused on defining
industry best practices. For the 2010-2011 research
programme, a team of leading thinkers in the
academic world and the financial industry has
been gathered by SimCorp StrategyLab especially to
examine the interactions between the challenges and
best practices in the asset management industry.
SimCorp StrategyLab
Thought leadership in investment management: SimCorp StrategyLab
suggestions for best practices which are intended to mini-
mise risk, find ways to achieve sustainable cost savings
and enable growth.
OrganisationSimCorp StrategyLab is formally organised under the
management of a board of directors. The chairman of
SimCorp StrategyLab’s board is the CEO of SimCorp,
Peter L. Ravn, Ph.D. SimCorp StrategyLab is headed by
the renowned Dr. Ingo Walter, Seymour Milstein Professor
at the Stern School of Business of New York University,
who is in charge of the research institution’s academic
affiliations and oversees the quality of its research work
and related activities. Along with SimCorp StrategyLab’s
partners, and building bridges between theory and prac-
tice, are leading academics, industry experts and execu-
tives who contribute to its research programme and other
activities.
Download the profile brochure at www.simcorpstrategylab.com to learn more about the vision and mission of SimCorp StrategyLab.
Go to www.simcorpstrategylab.com to learn more about SimCorp StrategyLab’s research programme and activities.
30
Legal notice
The contents of this publication are for general informa-
tion and illustrative purposes only and are used at the
reader’s own risk. SimCorp makes all reasonable endea-
vours to ensure the accuracy of the information. Howev-
er, SimCorp does not guarantee or warrant the accuracy
or completeness, factual correctness or reliability of any
information in this publication and does not accept liability
for errors, omissions, inaccuracies or typographical errors.
The views and opinions expressed in this publication are
not necessarily those of SimCorp.
© 2010 SimCorp A/S. All rights reserved. Without limiting
rights under copyright, no part of this document may be
Contact information
Australia
Sydney office:
+61 2 9241 4222
Austria
Vienna office:
+43 1 5120099
Belgium
Brussels office:
+32 2 213 3000
Canada
New York office:
+1 212 994 9400
Denmark
Copenhagen office:
+45 3544 8800
Finland
Helsinki office:
+358 9 685 2010
France
Paris office:
+33 1 5535 5454
Germany
Bad Homburg (Frankfurt) office:
+49 6172 9240-0
Munich office:
+49 89 306592-0
Hong Kong
Hong Kong office:
+852 2521 2680
Luxembourg
Brussels office:
+32 2 213 3000
Netherlands
Amsterdam office:
+32 2 213 3000
Norway
Oslo office:
+47 2310 4100
Singapore
Singapore office:
+65 6823 1517
Sweden
Stockholm office:
+46 8 528 01500
Switzerland
Zurich office:
+41 44 360 5900
Ukraine
Kiev office:
+380 444 958 600
United Kingdom
London office:
+44 20 7260 1900
USA
New York office:
+1 212 994 9400
Los Angeles office:
+1 424 354 5151
www.simcorp.com
reproduced, stored in or introduced into a retrieval sys-
tem, or transmitted in any form, by any means (electron-
ic, mechanical, photocopying, recording or otherwise) or
for any purpose without the express written permission
of SimCorp A/S.
SimCorp, the SimCorp logo, SimCorp Dimension and
SimCorp Services are either registered trademarks or
trademarks of SimCorp A/S in Denmark and/or other
countries. Refer to www.simcorp.com/trademarks for
a full list of SimCorp A/S trademarks. Other trademarks
referred to in this document are the property of their
respective owners.
Contact information
About SimCorpSimCorp enables global investment management organi-
sations 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.