5 best practices in automation implementation


Regardless of your fund's lifecycle stage, you probably have more tasks than time. Middle office work can feel especially burdensome; tasks are often repetitive and dull, taking valuable bandwidth from skilled employees whose time is better spent elsewhere.

But you can’t simply outsource manual middle office tasks to anyone. They aren’t merely time-consuming; they’re necessary. Accuracy is crucial, as most regulated and business-critical tasks allow zero margin for error.

Fortunately for funds, new automation tools and managed solutions put the best of both worlds within reach. Firms can dramatically reduce manual involvement and keep ahead of the competition with process automation.

In this article, we’ll share our top five best practices for implementing automation in your middle office and beyond.

But first, why automate?

The answer to this question may seem obvious, but we’ve seen countless firms pursue managed solutions and automation without fully understanding the benefits.

Here is a handful of our favorites:

  • Minimize risk exposure and liability by limiting manual processes
  • Improve efficiency and operational controls
  • Immediate access to cutting-edge technologies, including cloud-based tools, automation and artificial intelligence
  • Increase confirmation matching rates and get faster exception resolution
  • Support regulatory compliance efforts
  • Reduce pressure on staff to support multiple fragmented processes
  • Meet multiple market structure changes in a timely and scalable manner
  • Full transparency across asset class-specific systems
  • Beat competitors to market without steep upfront investment
  • Reduce headcount needed to support manual processes, focusing top talent where it counts

Once the ‘why’ behind automation is clear, you’re ready to manage and measure the ‘how’.

#1: Determine goals and objectives in advance

What should your automation accomplish, and how will you know whether it’s successful? In the world of established business processes, all change is painful. A predetermined gauge will help you see beyond the temporary transitional discomfort to the bigger picture.

Decide ahead of time how you will rate the success of your automated or managed workflow. What results do you expect once the dust has settled?

For example, if you’re automating your daily reconciliation, the goal is to ensure an accurate trading environment by identifying any breaks within the system and to remediate prior to the start of the trading day. The margin of error for daily reconciliations—especially for trading technologies—is zero, so a successful automation must identify breaks and remediate each day without mistakes.

Understanding your critical objectives in advance will help you fine-tune and assess the efficacy of your automation over time.

#2: Standardize repeatable processes

Eliminate manual touchpoints by standardizing repeatable processes, especially the ones most vulnerable to user error.

Build as many repeatable process automations as needed, but don’t go overboard. Comparable processes should share automation workflows whenever possible to simplify management on the back end. Ideally, you’ll end up with just one automation process that consolidates as many tasks as possible.

Establish set rules for each process and a templated format for your data that can accommodate nuances from your vendor systems. Decide how you will structure your database to account for variations when incorporating data from multiple sources.

#3: Create a system built to adapt

It may be a cliche, but the only constant is change. Make sure your systems anticipate changing requirements and can respond accordingly. Testing, tweaking, and at least a bit of manual QA are always necessary to ensure your automation runs smoothly.

Don’t architect a system so rigid that it can’t incorporate adjustments based on feedback, changes to vendor systems, etc. An inflexible solution is a recipe for frustration and inevitable redesign.

As a safeguard, run manual systems in parallel with new automations for a while after implementation. This gives you time to work out any kinks and check that your automation runs as expected before eliminating alternatives.

#4: Leverage data tracking to make your systems smarter

The best systems learn over time based on data patterns and new inputs. Don’t adopt a platform that will begin to stagnate as soon as you roll it out.

AI and predictive analysis are ever-evolving sciences that can help you stay ahead of the competition, but only if you’ve laid a solid foundation. Get the basics right first, even if you’re an early adopter of cutting-edge technology. Even the world’s most innovative software can’t function properly with bad data and uncertain workflows.

#5: Seek out expert advice

Automation is notoriously difficult to get right, especially without specialized expertise. Instead of taxing your team’s resources, hire a professional to help deploy your automation and monitor progress. The best providers allow you to have as much or as little involvement as you want, from consultation to a fully outsourced experience.

IQ-EQ’s team of former in-house experts understands how important it is to keep managers apprised of their market risk and positions with accurate real-time data. We support the full life cycle of middle office systems implementation, from selection through to execution.

Contact our team to learn more about our middle office automations.