Backoffice Finance and Investments: 5 Myths About Outsourcing

By Kleber Oliveira on

Every company has internal processes that maintain little or no contact with the customer and that are essential for its proper functioning. This activity can be described as Back office , or back office, whose main objective is to optimize the operation of activities, minimize risks and ensure a quality delivery of the product or service.

The services provided by the rear are crucial for the good growth of the business, because, if they did not exist, the enterprise would simply not be able to operate.

The sectors that work in this administrative support part are usually:

  • management;
  • human resources;
  • financial;
  • legal;
  • IT;
  • stock;
  • logistics.

That is, functions that focus on providing a good structure for the company, not having revenue generation as a direct presupposition.

But how does backoffice work in the financial market?

A company that works in the financial market, especially in investment funds, may have its operation divided into “three offices”:

  • direct interaction with the customer (front office);
  • risk management (middle office);
  • operational (back office).

The back office, therefore, consists of professionals who work behind the scenes of securities brokerages, and are responsible for activities of conciliation and control of fund assets/liabilities with their trustees and brokers. Responsible for building a solid, secure and error-free infrastructure, the financial back office ensures:

  • conference of values and operations;
  • transaction processing and settlements;
  • credit or risk regulation;
  • opening accounts;
  • reporting;
  • quote verification;
  • realization and update of registrations.

 

How does the financial back office add to investment results?

In order for customers to receive a positive and advantageous return, the quality of the investment must be analyzed from different perspectives, such as percentage of profitability, risk mitigation, cost of opportunities and operations, etc.

The third sector, as the financial back office is also called, plays a very important role in the entire operation: from a simple registration made with precise information, to the correct delivery of the report. If the basic information is mishandled, the entire activity could fall apart.

Therefore, for the financial application to be carried out effectively and for you to have confidence in the use of information throughout the process, the search for the optimization of the financial back office becomes essential. So find a complete solution for your manager or administrator, will make a difference to the success of your business.

An alternative that many companies in the financial market have been adopting to improve technologies and infrastructure, in order to reduce costs and focus on the main activity, is the back office outsourcing for investment management, through the BPO (Business Process Outsourcing) model.

We present below some arguments to demystify this option of investment management.

5 Myths About Financial Backoffice Outsourcing

 

1. It’s not safe

Among the several advantages in backoffice outsourcing, we highlight the information security through an automated platform, as well as the reduction of costs with personnel, technologies and infrastructure.

 

2. Unreliable

Confidence in the process, which was previously based on the team carrying out the activity and which depended strictly on the work of highly qualified professionals, can now be reinforced by automated processes, which are programmed to deliver a correct and expected result.

In addition, the BPO model is becoming more and more sophisticated. In this way, companies can count on auxiliary teams that are always up-to-date in terms of procedures and laws, avoiding the risk of overlooking regulatory and legal issues.

Outsourcing is indeed reliable and offers services from the simplest to the most complex, such as multi-currency asset consolidation, tax control, compliance and accounting.

 

3. It’s not scalable.

On the contrary. By adopting backoffice outsourcing through a BPO model such as the one offered by BRITech, you will be optimizing your business and gaining speed in investment management, including a dedicated team that is constantly updated and trained in the latest regulations.

See how we can speed up the processing of some activities:

Processing of Variable Income Portfolios

  • integration and beating with the Stock Exchange and/or Brokers (SINACOR);
  • calculation and calculation of taxes for investors (DARF, income report and quota eaters );
  • treatment of earnings and corporate events (dividends, bonuses, subscription, etc.);
  • control of revenue, funding, rebates, costs, expenses, fees and brokerage;
  • movement, position and cash flow reports by custody;
  • position lock and custody transfer;
  • consolidation of portfolios or multi-currency investments with quota or IRR calculation.

Processing of Fixed Income Portfolios

  • daily update of registers of government bonds, debentures and market prices;
  • valuation and pricing of onshore and offshore assets (interest, correction, amortization, etc.);
  • calculation and calculation of taxes (gross-up for incentivized bonds);
  • movement, position, duration, settlement and appropriation reports;
  • calculation and simulation of securities with issuance of calculation memory;
  • complete and integrated control of Assets and Liabilities (mirroring or paralleling portfolios).

Third Party Resource Management

  • daily update of fund quotas and registrations (ANBIMA);
  • fund comparison report (risk vs. return, quantitative and qualitative indicators);
  • explosion of shares, possibility of analyzing the composition of the invested fund;
  • suitability ensuring the allocation of investments according to the profile;
  • Shareholder / Officer portal (consultations and reports, upload and download of documents);
  • treatment of incorporation, merger or spin-off between funds;
  • complete treatment for Trust Administration, including Structured Funds (FII, FIP and FIDC).

 

4. Does not help business growth

Perhaps this is the biggest myth of all. That’s because the outsourcing of backoffice in the management of investment funds ends up providing more focus on core business .

As we already mentioned, core business it is the main activity of the company, that is, the actions and strategies that are at the heart of the organization and that will be carried out by the main investment managers.

Sometimes, a manager ends up not finding the human capital capable of carrying out the subsidiary activities and, as the training of these professionals is a costly and constant process, it is common for the back office to end up in the background.

For managers to keep their full attention on the core business , it is essential that they delegate the aforementioned activities, adopting the BPO (Business Process Outsourcing) model, or back office outsourcing , with the aim of paying attention to such functions while keeping the focus on their core activity.

 

5. It’s complex and difficult

Another myth without foundation. Hiring back office outsourcing is a simple, fast and easy process.

 

BRITech always seeks to optimize internal processes and help managers to improve their back office management without requiring any deviation from the scope of internal teams or unnecessary disbursements.

Count on the expertise of some of the world’s leading experts in the field to outsource your back office. Through state-of-the-art technology and highly trained and up-to-date teams found at BRITech, we deliver solutions of excellence for its customers.

Learn more today!

Schedule a demo and explore how the right reports, decision-enabling dashboards, and intelligent tools can help you drive growth and investor satisfaction.

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