The Profidata Group is one of the leading providers of software solutions for investment management. How important is the asset management industry for Switzerland?

Switzerland is the third-largest market in Europe. More than 50,000 people are directly or indirectly employed in this industry – and we are part of it. Our aim is to provide our clients with the tools they need to create real added value for their clients, rather than having to spend their time in the "engine room".

Profidata is the market leader among the largest custodians in Germany and serves "super ManCos", fund management companies, banks and insurance companies in Europe. What are your ambitions in your home market?

In Switzerland and Liechtenstein, we already count numerous renowned fund management companies, insurance companies, banks, asset managers and custodians among our customers. They benefit from a platform that covers the entire process chain and can be flexibly integrated into existing architectures, such as investment compliance based on holdings from any position-keeping systems. Our software solution processes all asset classes, including illiquid alternative investments. This saves our customers costly peripheral systems and complex interfaces – and therefore a lot of headaches. A central, flexible data model serves as a single source of truth, from data feed to reporting. We want to inspire other players in the market with this approach.

Margins in asset management are under pressure. In this context, the industry distinguishes between "good costs" and "bad costs". How can Profidata help here?

"Good costs" are those that create real added value for the customer and clearly differentiate the investment manager. "Bad costs", on the other hand, do not contribute to value creation. This is exactly where we come in with "Investment Compliance as a Service". Our clients benefit from continuously maintained "country rulesets" for the regulations of all important jurisdictions in the DACH region, supplemented by their individual rules, and can thus focus on breach management.

The increasing density and complexity of regulatory requirements are placing a considerable burden on the industry. How are you meeting this challenge?

Growing regulatory requirements pose a real challenge, just think of EMIR RE-FIT, CRR III, CRD VI, MiFID II or SFDR. Regulatory reporting falls under the "bad costs" mentioned earlier. In addition to these regulatory reports, our Reporting Suite also generates fact sheets and other desired reports – naturally in our clients' individual corporate design.

Alternative investments place special demands on investment management. How does Profidata deal with this?

The investment lifecycle is particularly challenging, as it is significantly more complex and lengthy for illiquid investments than for traditional investments. This ranges from structured onboarding and the precise mapping of instruments to the recording of commitments and the posting of cash flows, capital transactions, valuations and exit with performance measurement. We ensure data confidentiality throughout the entire lifecycle and support all processes with efficient document management. This enables our clients to offer all asset classes on a single, integrated platform with true multi-asset capability.

Time-to-market is essential, especially for alternative investments and innovations.

Exactly. We realised that large annual releases no longer meet today's requirements and place an unnecessary organisational burden on our customers. We therefore fundamentally revised our development processes and switched to the "Frequent Delivery Model" with monthly updates in order to bring innovations to our customers quickly. We have been working with this approach since the beginning of this year and the initial results are consistently positive.

Is GenAI more than just a buzzword for Profidata?

Absolutely. We see great potential in this and are working specifically on using this technology in investment compliance. Specifically, we want to use GenAI to automatically extract constraints from fund prospectuses or mandate agreements and translate them directly into business rules that are applied in the compliance process, both pre-trade and post-trade.

ESG remains a dominant theme in the industry. What does this mean for service providers?

ESG already generates an enormous amount of data that not only needs to be processed, but also reported accurately and transparently. The Sustainable Finance Disclosure Regulation (SFDR) sets out detailed disclosure requirements that vary depending on the type of financial product. Our flexible data model is designed to record this information in a structured manner, supplement it according to the individual requirements of the client and integrate it specifically into the investment process. Ultimately, it ensures that all relevant ESG data is presented in a transparent and comprehensible manner in the reporting.

The article appeared in the B2B magazine of Friends of Funds and can be viewed here in French.