FIS to Double Down on RegTech and Multi-Asset Coverage

FIS’ Investment Operations Suite, which is targeted at asset managers, has two main areas of focus this year: the convergence of asset classes and doubling down on its regtech capabilities, says Jason Baldesare, director of strategy within FIS Buy-Side Solutions.

The convergence of traditional asset classes with alternatives presents new challenges to asset managers’ technology infrastructures and operating models, Baldesare says. Among other current buy-side troubles, including the quick pace of regulations and shrinking profit margins, asset managers have had to diversify their investment strategies to include various credit instruments, real estate, ETFs, commodities, futures, cryptocurrencies, and beyond.

In turn, the asset managers that Baldesare’s team talks to are asking for help in migrating away from their legacy tech, and for solutions that allow cloud use, APIs, and interoperability between their own systems to be able to get data in and out easily. He says his team is continually working on solutions to provide those things, and adapting to the needs of buy-side clients.

“A lot of end-users want to see the results,” he says. “They want to see consolidated performance across the asset classes, consolidated risk, and consolidated returns. Being able to put a data layer on top of it and integrate the core solutions at the bottom—that’s what it forced us to do.”

Earlier this month, FIS acquired Virtus Partners, a provider of credit and alternative investment services, further allowing FIS to round out its asset class coverage, Baldesare says. The vendor specializes in credit instruments, such as structured credit, complex credit, bank loan debt, and collateralized loan obligations. The hope is that there isn’t an asset class out there for the buy-side that FIS doesn’t cover.

It’s also rare, he adds, to go into a client meeting in which the “alphabet soup of regulations” doesn’t come up, most often IFRS (International Financial Reporting Standard) 9, which covers accounting for financial instruments; IFRS 17, for insurance contracts accounting; and LDTI (Long Duration Targeted Improvements), to be implemented in January 2022 to US GAAP.

As a result, FIS is taking its IFRS 17 risk management solution for insurers, Prophet, and making it available in the US on top of plans of moving it to the cloud to allow for a quicker time to market, especially for the company’s smaller insurance and actuary clients.

Further regtech releases from the vendor this year will include European-focused banking solutions as well as updates to FIS Protegent CAT, the firm’s reporting platform for the US’s Consolidated Audit Trail.