Front office staff are spending too much time solving technological errors on a day-to-day basis, which could be costing firms up to 50% of revenues, according to a recent study by TABB Group.
The consultancy found 38% of asset managers have front office staff spending between 30 minutes and an hour a day rectifying technological errors, which it says is an “expensive proposition”.
TABB Group explained: “Trade delays caused by inadequate technology could account for opportunity costs of anywhere up to 50% of revenue, with a full 20% estimating their opportunity costs at 10% or more.”
The survey also asked firms, who were all asset managers based outside of North America, about employment of technology and multiple vendors.
It found 30% maintain legacy platforms, despite them contributing to trade delays and errors.
“Firms are maintaining out-dated systems or platforms that have been in place for an extended period,” TABB Group said.
It added: “Until the outmoded system causes a major financial error it is possible that the architecture will stay in place well past its sell-by date and even the point where the vendor supports it.”
The study concluded that firms must upgrade systems if they are to ever achieve alpha, compliance and ultimately, growth.