SimCorp, a provider of investment management solutions and services to the global financial services industry, has announced a raft of enhancements and developments of its flagship investment management software solution, SimCorp Dimension.
The 6.4 release features several advances to the system, covering the full investment management value chain, from front to back. One of the primary features of the release is new and advanced accounting analytics for the front office, created to meet the growing complexity across the buy side, particularly in the global insurance sector. An enhanced Collateral Manager, and new functionality to help clients with European General Data Protection Regulation (GDPR) compliance, also forms part of the advances, designed to meet evolving client and market demands.
The new accounting analytics functionality, part of SimCorp’s Asset Manager module, allows for a wide range of analytics, including the ability for asset owners and asset managers to construct their portfolios with a view to targeting P&L at year or period end. This is an important step in liability driven investment, and valuable to any firm running liability driven or tax sensitive investment strategies in their portfolios.
SimCorp’s established ABOR (Accounting Book of Record) has multiple accounting and tax frameworks supporting local GAAPs (Generally Accepted Accounting Principles) and international standards like IFRS, across multiple currencies. The new enhancements, which continue SimCorp’s integration of front office and accounting modules, ensure that the buy side has access to analytics from all relevant accounting frameworks simultaneously in Asset Manager, providing the front office with easy access to relevant back office data for its investment decision making.
In particular, the insurance industry has distinct complexity with multi-tier legal and company structures that require reporting to authorities across different jurisdictions and geographies, all of which is managed through SimCorp’s ABOR engine. The consolidated and aggregated accounting figures from the ABOR, which will now also be made available to the front office, will empower the front office decision process. For example, portfolio managers of insurance firms can access these figures in simulations, to optimise their portfolios. This approach seeks to consolidate IBOR and ABOR data into a single view to overcome the need for heavy reconciliations between front office and accounting platforms. This challenge is often seen in the insurance sector, as firms continue to ramp up asset management activities to cover increased liabilities.
The 6.4 release is the result of the strong and continued collaboration with SimCorp clients and demonstrates SimCorp’s commitment to prioritising system upgrades and enhancements, based solely on the requirements of clients. It forms part of SimCorp’s strategic R&D, which sees an annual injection of around 20 per cent of its revenue.
SimCorp has continued to develop its Collateral Manager to meet the recent regulatory variation margin rule changes, which require rounding in favour of the party being collateralised. It has also made changes that enable firms to further optimise collateral decisions and automate collateral processing across a wide range of instruments, with the introduction of 11 additional financial instruments. Collateral management and reconciliation enhancements include the new fund look-through ability, designed to deliver better collateral selection and portfolio optimisation. These tools help firms to control under-collateralisation and more importantly, minimise over-collateralisation, resulting in significant cost savings.
SimCorp’s established accounting functionality has been further enhanced with accounting for bonds with call options, bought at a premium, in accordance with US-GAAP Accounting Standards Update ASU 2017-08, which will come into effect for public entities from January 2019. The new functionality ensures clients can comply effectively with US-GAAP, without adding manual workflows outside of SimCorp Dimension.
Earlier this year, the new European General Data Protection Regulation (GDPR) introduced rules intended to strengthen and unify data protection for all individuals within the European Union. To aid clients in their compliance with this regulation, SimCorp has created functionality to support data privacy management processes around personal data. This includes an automated workflow, which consolidates personal data, making it easier to delete and anonymise, including data stored in the audit trail. The new workflow reduces operational risk, and benefits clients that have to comply with strict data protection regulations not only in the EU, but also in other jurisdictions around the globe.
A new add-on is available for the KPI Manager Cloud app, which enables operational staff to monitor their trade processing efficiency against peers via an STP rate benchmark. The benchmark is calculated across all SimCorp clients using the Trade Processing KPIs. The new module will allow clients to view STP rate benchmarks and define custom KPIs in the KPI Manager. Recognising the numerous applications and manual workarounds many firms have in place, the KPI Manager aims to help clients address the positive impact of automation on firms’ profitability. In a recent WBR report, automation was considered one of the key strategic priorities for reducing costs and increasing STP is vital to this objective. SimCorp has helped some of its clients increase STP rates to 99 per cent and in turn reduce the overall cost of operations.
Marc Schröter (pictured), SVP and Head of Product Management, says: “We are committed to continually innovating SimCorp Dimension in line with our clients changing needs and in response to market and regulatory changes. SimCorp is uniquely placed in the market, with our consolidated investment platform and dedicated R&D investment, to offer clients a market leading back office integrated with a highly competitive front office. Going forward, we will be moving from bi-annual to quarterly releases, in order to consistently serve clients with the latest version of our integrated front to back investment system, which forms the lifeblood of over 180 clients’ investment management operations worldwide.”
