Weak financial markets have driven SA fund managers closer to outsourcing companies as they have been forced to find ways to cut administration costs so they can focus on their core business.
According to specialist administration outsourced solutions provider FinSource Group, SA is also becoming a prime country to provide such services to First World countries at competitive prices with a skilled workforce.
The exponential growth of outsourcing means deepening the relationship between clients and providers to the extent that the relationship can now be described as a collaborative partnership. This has allowed FinSource to widen the scope of services it provides to its clients.
"Collaborative commerce is the new buzzword," says Dale Lippstreu, FinSource Group MD. "In our business this translates into meeting the broader administration and information technology requirements of our clients."
While back-office administration has been and remains the group`s core service, its clients are increasingly involving it in the broader scope of their businesses.
"Given our knowledge of the industry and our intimate understanding of a client`s business through the existing back-office relationship, we are placed not only to meet their requirements but also to anticipate new and emerging requirements.
"Apart from efficiencies and cost benefits, a major advantage for the client is that there is a single point of contact and accountability for a broad range of products and services," Lippstreu says.
In the middle office, FinSource IT services subsidiary FinSolutions has enabled the group to offer seamless IT services that include network management, application hosting, software development and an offsite disaster recovery facility.
In the front office, FinSolutions has recently acquired QuantWare, a specialist supplier of decision support applications for portfolio managers. The product offering ranges from bespoke software development to a series of sophisticated applications such as benchmarking, multi-factor ranking and optimisation techniques for quantitative analysis.
Mike Jenkins, business development director for FinSolutions, says: "The fund management industry is under enormous pressure to reduce costs and many institutions are looking to technology to provide these savings in the longer term."
Lippstreu says that while SA can offer European and US companies a relatively cheap and efficient way to outsource their administration, there are still some issues that have to be overcome.
"The cost and the slow bandwidth we have in this country is an inhibiting factor and has to be addressed. Government must create an enabling environment."
Lippstreu says SA is well positioned to take advantage of the trend to outsourcing administration as it operates within the same time zone as Europe, has similar cultures and languages, and has sophisticated financial markets.
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