Buy-Side Technology Awards 2014: Winners' Circle—Eagle Investment Systems

When you speak with your clients, what are you hearing as the key challenges they’re facing at the moment?
John Lehner, Eagle Investment Systems: In general, clients are faced with a combination of technology shifts that are under way, as well as rapidly changing business requirements. It’s very challenging in that the operating models and the opportunities presented by technology are fast emerging, but the cost and the understanding of how ready they are for adoption into steady-state models is one that everyone continues to evaluate.

People are clearly shifting away from on-premises toward cloud-based or outsourced, fully integrated solutions. And our clients are continually faced with the risk of assessing rapid change in both what they’re asked to process, and asked to provide to clients, internal constituents, and regulators.

What do you see as the current trends in outsourcing, in terms of what buy-side firms are giving to you as outsourced providers, and what they’re keeping in-house?
Lehner: Most organizations are trying to get comfortable, and understand what it means—frankly, there’s often a misunderstanding when it comes to outsourcing. People tend to immediately think of offshoring, and they think of lower cost, but questionable quality.

The conversation we often have to have with people is one where we go through and create the understanding of what outsourcing really is, which is combining the technology with the integration into a full platform. Potentially that can include people to support operations, but it’s not a one-size-fits-all solution where you just turn over the keys to everything. We’re seeing people getting more familiar with trying out components, and as they do that, we clearly see it moving further through the entire operating model, from the back office, through the middle office, and even extending into the front office. The entire workflow is being considered now.

There has been a large amount of coverage around cybersecurity of late, and part of that focuses on the security at third-party providers such as Eagle. Is cybersecurity a significant area of focus for you? 
Lehner: It’s one of the main topics of conversation we have, in terms of privacy, security, understanding where the individual investor data resides, who has it, and who doesn’t have access to it. That really is, at the moment, the top concern in and around outsourcing. People are comfortable with the model, they see the trend, and certainly the large amount of investment that’s going into it, and I think that outside of our industry, this type of model is the standard. What we’re coming to terms with is what additional precautions need to be provided above and beyond that standard, so that people can be comfortable that additional risk is not created. That applies to complete outsourcing arrangements or component outsourcing equally.

In terms of your service offerings, what can we expect from Eagle over the next 12 months?
Lehner: As we continue to provide more services bundled with the technology, our thinking is evolving quickly and dramatically. If you look at technology providers, and certainly those that are largely on-premises, they are very reactive. Their support structure and service model is one that reacts to problems or scenarios once they’re identified or arise. Given what we’re doing, and the volume of clients that we’re working with, both in the cloud and in the outsourcing space, we’ve already started implementing capabilities that become much more predictive, and much more focused on preventing errors, breaks or exceptions from occurring. We’re able to do that at the technology layer, and one of the things we’re continuing to do is invest in our monitoring capabilities so that we can profile our clients, and understand what their typical windows and cycles look like. Once they start to deviate from that, we can preemptively engage with them to stop a situation from occurring. It’s very exciting.