PE Tech Report


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The convergence of fund administration and FinTech

By Robin Bedford (pictured), Opus Fund Services – As the rate of change in the fund administration industry continues to increase, the ability to remain nimble becomes of critical importance. In a period of active industry consolidation, failure to remain `relevant’ results in being absorbed into a stronger more dynamic competitor. 

Opus was born at the start of the global financial crisis and after a decade of significant investment, we have transformed the fund administration world. Hedge funds and their investors have been a major beneficiary of these changes, with increasingly sophisticated services delivered at a fraction of the historical cost. 

Opus has embraced the disruptive nature of FinTech to sharpen operational efficiency and respond to the demand for more innovative services. We have driven down cost to service by focusing on a repeatable, scalable process driven by technology, not headcount. 

The forces shaping industry change demand that the role of the fund administrator increasingly needs to also be that of a technology services firm, rather than simply a provider of financial services. The influence that FinTech is having on the fund administration industry is growing and the long-term demands will be even greater.

Whilst disrupting business models of legacy administrators, Opus also disrupts our own operations by introducing a culture where everything is challenged. Opus uses the vast amounts of data collected from over 450 clients to challenge innovation inside Opus. This culture of innovation allows us to bring solutions to market quickly, such as our recent OpusNotes product release for the marketplace lending space. 

Whilst much of our competition relies on off the shelf solutions, we operate under the assumption that this stifles the innovation process. The inherent operational hurdles of off the shelf technology are a cost driver, as many of the required processes are manual and cannot be overridden. Administrators must fit their processes around the technology. Whereas Opus can build technology to fit our exact needs, which ultimately provides a better client experience at a lower price.

Prioritising the innovation process has been key for Opus given the opportunities and benefits of focusing on FinTech innovation. Allocating considerable capital to initiatives that leverage new technology development allows us to respond to the ever-changing demands of our clients and their investors. Opus has focused on hiring and retaining people with the necessary skill-sets needed for innovation, resulting in a rich culture of innovators within the company.

The rapid evolution of the fund administration industry is a major barrier to entry which will result in further consolidation over the next five years. Whilst fund administration has traditionally been slow to change, new managers entering the market expect the same level of service and innovation that they get from the innovative companies in other sectors/industries. It doesn’t take 20/20 vision to see that only those players nimble enough to meet these standards will survive the decade.

Opus fully leverages our proprietary platform ensuring it is customer-centric, technologically up-to-date, and supportive of internal and external innovation efforts. To remain a leader, innovation is embedded in our culture and strategic agenda. At our company, we are constantly asking ourselves what can we do to ensure that we continue to disrupt the industry. 

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