Investment System, Invetsment Technology and Investment Technologist

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An investment system is a software application that performs all investment related operation from font office to the back office. Such investment system can perform, but not limited to, the following:

• Presents analytic reports to the fund managers
• Assist fund managers in portfolio re-balancing and portfolio construction
• Help fund managers in portfolio implementation and placing trades with the traders
• Perform pre-trade compliance check of new trades
• Assist traders in order management and trade execution
• Assist traders in allocating executed orders to different investment accounts
• Helps the settlement department in order matching, broker confirmation and sending settlement instruction
• Generate daily valuation report and perform reconciliation with the custodian and any other counter party
• Generate report on investment return and performance

In a larger firm (usually big investment bank), the company employ teams of software developers to develop the system in-house. They will hire software architect, system analysts and programmers to develop the system. Although the cost is high but the developers can tailored the investment system to fit into the bank's investment operation.

For smaller fund managers, they usually buy ready-made investment system and implement such system with limited customization. The company may need to adjust their investment operation to fit the investment system.

Please note that not all software vendors are able to offer a complete solution from the front office to the back office. Some software vendors specialized in front office system, whereas some specialized in trading or back office system.

In the event that your front office system and back office system are from different software vendor, you would need a middle-ware that could interface between both system. Please stay on this blog if you would like to know about choosing investment system and implementing them.

An Investment Technologist is an IT specialist who provides technological solution to the operation of an investment firm. Besides IT knowledge, it is imperative for an Investment Technologist to know about the business operation of an investment firm. 

An investment technologist involves in the development, implementation and support of an investment system. It is the responsibility of the investment technologist to ensure the continuous operation of the investment system because when system goes down so does the business operation. 

An investment technologist usually does not involve in the day to day operation of managing servers and network infrastructure although in some smaller outfit the investment technologist has to double the role as system engineer.

A successful investment technologist should provide solution that fits into existing investment operation. Therefore, an investment technologist must know the detail operation of each department from the front office, trading desk, middle office and back office. It would be easier for a technologist to recommend a suitable technical solution if he/she knows how each department work together. Based on my previous experience, I would say that knowledge of investment operation is more important than technical knowledge.

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