Driving into a Cloud-Based Future

By Grigoriy Milis 

It is not uncommon for conversations regarding your firm’s cloud infrastructure to be left to the CTO. If you are running finance, operations, compliance, or IR/marketing, you have likely heard terms such as ‘digital transformation’ and ‘operational efficiencies’ in management meetings during conversations about your ‘legacy technology.’ With the cloud’s proliferation as a secure operating environment for data servers and software tools, there is a general appreciation that migrating your technology stack to a public or hybrid (public and private) infrastructure likely has some benefits. However, most managers’ C-suites underutilize the benefits the cloud can bring to the business functions they oversee, primarily due to a lack of understanding. There are many benefits the cloud can offer each member of your firm’s leadership.    

The strength of data analytics powered by the cloud is a function that overarches all aspects of the firm, especially as investment managers become increasingly data driven. For a CFO especially, various financial components or metrics, such as fund accounting, payroll systems, P&L, and revenue reporting, can come from a variety of separate sources and systems, making reporting a complex manual process. Cloud technology enables a CFO to easily connect all the sources of their data and coalesce them into a single reporting format. Similarly, IR & Marketing teams can create a single point of access for the various risk and performance metrics demanded by LPs, providing live data that meets the most sophisticated investors’ demands. What previously might have taken a team of analysts weeks or more to collate can now be generated in real time through automation at a fraction of the cost.  

The cloud also provides managers with a greater level of transparency, which in turn offers dynamic insight into real time operational effectiveness. With the ability to access core business applications from a single point of entry, COOs can access a level of firmwide analysis that goes a level deeper than traditional software ever could. Firm leadership can discover trends, both internally and externally, that before would be hidden by a fog of operational complexity and redundancy. The cloud provides extra clarity that can drive quicker operational decision making.  

An added bonus for a COO, especially in the current environment, is the ability of the cloud to seamlessly scale firmwide technology resources up and down at will, allowing for  a firm’s workforce to readily shift from the office to a WFH environment, or vice versa, at a moment’s notice and with no deterioration in operational performance. The cloud ensures that the operating environment of the firm is always backed up and primed for disaster recovery.   

Through the cloud, teams can seamlessly collaborate, enabling quick decision making. For a CIO, their PMs, traders, and analysts can work just as closely at home, using cloud technology, as they would on a trading desk. This is especially important during volatile markets where investment and trading decisions must be made at a rapid pace – without collaboration tools it would be next to impossible.   

One of reasons why people are apprehensive to adopting the cloud is the misconceived belief that it is not secure. However, this is not true, solutions such as Office 365 contain security tools that have been designed with financial services institutions in mind, securing public cloud ecosystems to a level that regulators are very comfortable with. Many of the security controls offered by the premiere public cloud providers are in many cases more powerful than anything available through on-premise technology. For a CCO, this means that cloud technology can provide a resilient solution to the strictest regulatory and investor demands.   

Because the cloud now can help all areas of your business, the C-suite of every alternative investment manager should be focused on accelerating their firmwide cloud adoption in order to digitally transform all areas of their operations to maximize efficiency. However, migrating a complex infrastructure over the cloud and then customizing it to meet the different needs of your C-suite can be a daunting task. Firms should have a cloud expert behind the wheel. Working with an alternative investment cloud specialist can alleviate that heavy lift, as they can analyze your operating model and workflows to design and implement a more secure and automated environment which both your investors and regulators will thank you for.