Tougher regulatory environments? Assess your fund accounting software

Tony Solomou - April 19, 2018

The winds of compliance have become considerably tougher on financial organisations over the last couple of years. Revelations such as the Panama documents leak have been adding nails in the coffin for family offices, Fund managers that have been enjoying smooth sailing in foreign countries with minimal to zero auditing requirements.

Even the most remote offshores will soon be required to keep audit ready accounts. The noose is also getting tighter for smaller management companies, with increasingly stringent regulatory requirements heading their way.

Respect for Back Office Operations

The wild west of account keeping is over. And like it or not, a comprehensive fund accounting software is becoming non-negotiable for both smaller single family fund and mega financial organisations based in offshore locations.

As the guardians of financial assets, these are the folk who are trained to watch the pennies, execute checks and verifications of the fund’s transactions, ensure compliance and a clean audit report, carry out double entry that ultimately provides the big picture to guide front office in their decision making.

Back office functions within the family office include:

  • accounting
  • monitoring of all operations
  • payments, collections and transfers
  • recording of market prices and exchange rates
  • custodian and bank reconciliation
  • management of fixed assets, real estate, etc.
  • reporting to clients / beneficiaries
  • billing of fees, commissions to clients

Mervyn King, ex-governor of the Bank of England, explains the importance of a reliable back office within financial institutions:

“Although the ultimate funds transfer may be handled via computer, the instruction is handled by a human being who is fallible. Thus the efficiency and reliability of the back office staff and their appreciation of the risks of the operations of the front office is paramount. Similarly, the attention given to training within this vital area and its ability to keep up with the developments of both instruments and systems will single out some institutions from others.”


The Smart Back Office Solution

It’s understandable that single family offices who have been getting by with minimum administrative staff, as well as offshore FO’s based in jurisdictions with a relaxed attitude towards account keeping, would consider the implementation of a stringent back office as an unnecessary cost.

In these scenarios, a fund management software with straight-through processing (STP) capabilities is bound to lessen the pain of getting your family office’s compliance up to scratch. 

Wealth management software with STP functionality, essentially provides the family office with a back office system that:

  • Reduces the human interface
  • Is cost effective
  • Eliminates the risk of data entry mistakes by cutting out the need for double entry of data
  • Provides reliable, live data for reporting and analysis as a single database is used for all transactions
  • Keeps audit-ready reports
  • Is powerful enough to execute/automate consolidation and analytical tasks
  • Is robust enough to meet financial requirements and account management needs

Back Office Solutions for Family Offices, Big and Small

If you would like to discuss your family office software specific needs in terms of back office capabilities we’d love to hear from you. Contact us to book a no-commitment demo.

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