The Opportunity
A leading Canadian Pension Fund, managing over $80 billion in assets, faced challenges with not being able to attribute fixed income performance, over-reliance on custodians for accounting function, and manual workflows for processing and handling derivatives and other OTC instruments. FINARCH partnered with the pension fund to deliver the largest transformative solution in their companies history, enabling a cloud-based advanced analytics platform, operational autonomy, and cost efficiencies.
The Solution
FINARCH guided the pension fund on their digital transformation journey and successfully implemented a tailored, integrated platform
New Target Operating Ecosystem
Front Office OMS/EMS
Bloomberg AIM
IBOR/ABOR
SimCorp Dimension
Middle Office
Risk (MSCI Barra), Performance (SimCorp Dimension)
Reporting/Cloud
Snowflake, Sigma, PowerBI
ABOR Transformation
The pension fund was able to internalize all of their previously outsourced accounting workflows and processes. This addressed gaps from the outsourced solution, but also provided a golden source of data which is the backbone of the new data and analytics hub.
Fixed Income Performance Attribution
The target solution fully integrated a fixed income performance attribution module, which was fully integrated with Snowflake and Sigma, allowing a web-based analytics hub for all their performance attribution and positional and risk data.
Cloud-Based Data and Analytics Hub
Complementing and integrated with the new ABOR, a new cloud-based Reporting architecture was implemented which utilized Snowflake for cloud infrastructure, and Sigma and PowerBI for end-user reporting and visualization.
Risk Management Transformation
MSCI BarraOne was implemented to provide factor analysis, risk and other exposures in a best of breed web application. The solution was fully integrated with the IBOR/ABOR system, requiring no manual intervention or spreadsheets, which were depreciated.
The Impact
The impact for this initiative paid huge dividends to the organization almost immediately. Operational costs were reduced as a result of internalizing several functions, manual processes and spreadsheets were depreciated, savings the company time and reduced the amount of errors. Reporting was significantly improved, which went from Excel/Batch Reports to a self-service model, which is fast and scalable.
Beyond efficiency gains, the implementation of fixed income performance attribution was a game changer for front and middle office, giving them more insight into their portfolios and assisting with hedging and investment strategies. Most importantly, having a scalable, robust and integrated ecosystem allows the firm to invest in new products and instruments, increase AUM, and execute new strategies to drive growth.
By unifying their systems and processes, and implementing a modernized cloud and reporting infrastructure, the company achieved a future-ready ecosystem which is reduced costs, improved operations, and provided more transparency into making investment and operational decisions.
- Internalized Accounting and Saved Costs
- Enabled Fixed Income Performance Attribution (FIPA) Functionality
- Turned Excel-based spreadsheets for valuations and OTC derivatives, into a standardized system workflow
