Seems like every year I write a blog during the holiday season. And I always make it a point to tell everyone how much I love the holidays. Many of my co-workers know I’m a sucker for cocktails at a festively decorated bar (sadly not an option this year) and I absolutely LOVE my end of year vacation so I can get some serious binge watching in—though when I start to think about the year ending, it makes me a little sad (until I remember season 3 of Cobra Kai gets released in January).
The new year will be here in no time and one of the biggest trends we will still be watching in 2021 is the evolving front to back vendor landscape. Solutions like SimCorp and Enfusion have been around and offering a holistic, front to back option for some time. However, whether it is referred to as ‘front to back,’ ‘holistic,’ or ‘an enterprise platform,’ the craze in the services and software market did not seem to take flight until State Street launched their Alpha solution about a year and a half ago (on the heels of their CRD acquisition) and now it’s one of the hottest topics in our industry. New options are coming to market and industry stalwarts are answering by building out their solutions through partnerships and development. Here are a few vendors in the front to back space that I will be watching in 2021 (along with Cobra Kai, of course).
Ridgeline – the vendor you’ve never heard of with the famous founder
Ridgeline is a relatively new cloud-native enterprise platform built on Amazon Web Services. Per their website, “Enterprise means one copy of data and positions, one software version, and one solution to the fundamental problem plaguing this industry—outdated technology.” The elimination of upgrades in investment management technology is something we have talked about before in our thought leadership (and I wrote a blog about it in 2019) so the promise of this in an enterprise platform, is truly intriguing. Their founder and CEO, Dave Duffield, also founded two other tech giants: PeopleSoft and Workday. To date, they have mostly been focused on a “design partner” model. In a nutshell, this is bringing on clients as early adopters to assist with building out the product and roadmap. Expect to hear more about Ridgeline in 2021 as they go-live with their initial design partners and start to bring on more clients.
BNY Mellon – the anti-front to back, front to back
BNY Mellon’s answer to State Street Alpha: OMNI (my words not BNY Mellon’s). In a nutshell, OMNI (Open Modular Network Integration, which was just rolled out recently) is an approach to offering data-centric, front to back integration for a best of breed model. BNY Mellon is attempting to capitalize on the fact that a single vendor, front to back solution won’t be appealing to all firms and are leveraging both their bank-wide capabilities and their footprint in many firms’ best of breed models to offer an approach to integration for clients; however, you don’t have to be an existing legacy Eagle, BNY Mellon Asset Servicing, or custody client to take advantage of this model. Over the past few years, we have seen BNY Mellon partner with some of the leading front office vendors (e.g. BlackRock, Bloomberg, even SimCorp), which will further enable the OMNI approach.
BlackRock Solutions – I wouldn’t count them out
BlackRock Solutions is not playing the front to back game—meaning as far as I’ve seen or heard, they aren’t out there marketing a front to back solution. But really, by all accounts they do have one. Building on the reputation and adoption of the Aladdin platform in the front office, they have added Aladdin Accounting and Aladdin Data Warehouse in the past few years and also expanded support for multi-asset investing through their acquisition and integration of eFront. Further, they have teamed up with many of the custodian banks through their Aladdin Provider model including JP Morgan, BNY Mellon, Citi, BNP Paribas, and Northern Trust, who includes this partnership as part of their ‘Whole Office’ strategy. BlackRock is usually quieter with their marketing of new products and I haven’t heard about what they are focused on next, but I wouldn’t expect them to stop investing in their holistic solution any time soon.
Whether front to back solution or best of breed system model, the current speed of change and innovation in asset management technology is unprecedented and there will certainly be more than these three vendors and service providers with exciting things to show us in 2021. Until then, cheers to the holidays (and you still have time to binge season 1 and 2 of Cobra Kai before the new season drops in January).
Disclaimer—neither I nor Citisoft has fully evaluated the aforementioned solutions. The intent is to share some insights into vendor (and service provider) solutions which I am aware of but may not be mainstream knowledge to readers.