Wednesday, 31 August 2016
Last updated 8 min ago
Feb 27 2014 | 10:28am ET
Investment Book of Record—or IBOR—software may be a financial industry buzzword but it's not yet the object of significant financial industry uptake.
SimCorp, a financial software specialist, recently polled 136 buyside executives representing 79 investment firms on the subject of IBOR, which aims to provide a real-time view of investment data across an entire organization, allowing for reduced latency and better ad-hoc client reporting and investment analysis.
The survey found that while 63% admit their front, middle and back offices do not work from a common set of real-time position data, most (58%) have no plans to introduce an IBOR system to address the problem.
A whopping 94% believe it is important for executives to “understand the relevance of an IBOR for an intraday view into a firm’s trading and portfolio management operations” and 95% agree “it's important to have on-demand access to portfolio calculations across asset classes.” But only 46% were able to generate intraday position snapshots.
Todd Healy, head of investment operations at BMO Global Asset Management, said his firm has benefited from IBOR adoption:
“The greatest business advantage for BMO is that the IBOR provides the most up-to-date position data to drive better portfolio and trading decisions. At all times, the IBOR contains full, accurate information on which our portfolio managers can make investment decisions and traders can trade. The risk of wrong decision-making based on incorrect data is simply too high to continue being ignored.”
David Kubersky, managing director of SimCorp North America, said in a statement: “While near-term resourcing strains and competing demands often inhibit visionary action and implementation, the ROI over the long term is very compelling for those firms that coalesce stakeholders to rise to the challenge.
“For example, a recent study has shown that enhanced investment management capabilities can yield productivity and profit gains that translate into anywhere between 51-242 basis points of retained alpha. This illustrates that an IBOR is indeed more than the latest industry buzzword.”