Part 2: How Ridgeline Is Solving for the Investment Management Industry

Aug 16, 2022
Jack Lynch, Head of Strategy
5
 min read

This is the second of a two-part series around The Industry Cloud Revolution. Read part one, “The Future of Investment Management is Here” now.

We are taking a platform-based approach to building Ridgeline, architecting our industry cloud into multiple layers so that it provides truly differentiated value from legacy offerings allowing investment managers to better serve their clients:

  • Core investment management functionality
  • Platform-wide technology services
  • Robust, secure and reliable cloud infrastructure 

I. FRONT-TO-BACK CORE FUNCTIONALITY

Ridgeline’s suite of purpose-built applications is designed to drive workflows from the front to back office. Attracting new investors, managing investor relationships, implementing investment strategies with rock-solid compliance, then finally accounting and reporting. Three primary sets of functionality drive the front-to-back suite: 

1. ACCOUNT AND REPORT

Building a sophisticated investment accounting system from scratch is hard, which is why the industry has had to rely on the incumbents for so long. We’ve hired foremost experts and started with the question, “How can technology make this better?” The result is an accounting system capable of handling tomorrow’s investment management needs. 

The heart of our system is an event-driven double-entry accounting engine. Double-entry gives our customers a high grade of transactional transparency and configurability in the ways they account for a multitude of asset types and currencies and trillions of data points. The journals mean you always know where data is coming from and you can create highly accurate performance reports all while ensuring compliance with industry standards such as GIPS. 

2. TRADE, EXECUTE, AND COMPLY

Trade order and execution management starts with order creation tools to enable your most critical resources to easily handle more assets and relationships. Ridgeline has a built-in collaboration and workflow engine so your team can efficiently manage models, allocate assets, and create block orders – while staying compliant at every step.  We’ve designed our trading functionality to handle multiple asset types and be capable of accessing multiple trading venues via FIX (i.e., dark pools and broker algos) and, ultimately, connecting you to third parties such as the DTCC and global trade settlement. 

3. ENGAGE INVESTORS

Ridgeline brings it all together for your firm with a 360-degree view of your investors to drive an optimal client experience. With everyone at the firm having the same views across roles, our users access a complete picture of an investor’s relationship with the firm, their portfolios and sub-portfolios, positions and market values, and recent transaction activity as well as investment documents and more. From Ridgeline’s Investor 360, users can launch directly into a client’s investment lifecycle. 

We deliver all of this functionality in one, unified system that shares a common data set. The result is that decisions are made off of the same set of tax lots, using the same security master and the same market data. Clients are onboarded once, compliance lives pervasively across the system, and, for the first time, relationship managers truly have a near-real time view. 

We call that real-time view Ridgeline’s Single Book of Record. Having the most up-to-date information in all parts of the system means the front office has up-to-date details about intraday positions and accurate views into the key components of clients portfolios so they can provide the most informed service. 

II. PLATFORM AND TECHNOLOGY SERVICES

Underlying Ridgeline’s application suite is a set of microservices that drive an integrated “platform” experience. Real-world events (e.g., a trade execution, a corporate action, a compliance rule violation) trigger the system to message and publish the information simultaneously to all core functionality. The result is that the entire system is operating from one version of the truth and there are no more data discrepancies across teams. 

One use case where it’s easy to see the benefit is onboarding a client. Onboarding typically entails:

  • Creating a new client profile 
  • Inputting investment mandates 
  • Setting up portfolios 
  • Adding to necessary groups 
  • Setting compliance rules
  • Connecting custodians
  • Uploading prior transactions/history

Historically, each of these steps needs to be completed in every system across your operational tech stack. In Ridgeline, however, you only have to onboard a client once for all of those "events" to be consumed across all functions near instantaneously versus a time-consuming batch. The result: once client service onboards a new active investor, trading is alerted that portfolios are funded and ready to trade, the operations team is ready to account, compliance rules are set, portfolio reports are available and your team is off and running. 

Additionally, platform-wide services are re-used across the system to provide a universal enterprise experience. Some examples include:

  • Consumer-grade UI/UX: We’ve prioritized making the user experience easy to understand to enable adoption by your whole team. This reduces a firm’s risk of dependency on any one person to be a gatekeeper to critical systems. You can also configure your experience with configurable grids and saved views. 
  • Data Orchestration and Integration: Connect to a variety of data sources (e.g. custodial, market & reference). All data in Ridgeline is available in our data lake, and can be queried. Gone are the days of batch. 
  • APIs: All APIs are open and published securely. APIs are documented in plain English, to facilitate interoperation with proprietary systems and get data out into a consumable format. We build the API first, and the UI on top. 
  • Permission and Entitlement: Set up users once, and centrally manage their access to functionality, and data. 
  • Workflow Engine: Configure your core process flows to accelerate operations without a line of code. Automate common workflows such as compliance overrides, client onboarding, monthly close processes, and report generation.
  • Task Management and Alerting: Generate system-wide tasks, alert specific users, automate, and schedule different jobs to be done. 
  • Audit: When an event is generated, Ridgeline captures all the who, what, when, and where. A robust audit log keeps track of it all so you can check allocation history, click into each step, and generate an audit trail with a click. 
  • Global Search: From a ticker, to portfolios, to transactions or a favorite report, you can find anything across the system just by typing into the search bar. No more hunting through complex menu structures to get what you need.

III. FINALLY, CLOUD NATIVE

Remember that claim on our website’s homepage? Ridgeline is the industry cloud platform partly due to the fact that we are cloud-native. With the help of our partner Amazon Web Services, we have deployed Ridgeline as a highly-available, secure, and reliable service born in the cloud. You may be wondering, why does that matter? It matters because cloud offers users benefits and reliability that far surpass what on-premise (or even cloud “hosted”) legacy technology can do, including:

  • Continuous Updates: No more expensive and painful upgrades: Ridgeline continuously pushes code to the system, which allows for seamless, uninterrupted and backwards-compatible updates. As new capabilities, features, and fixes are developed, they reach you quickly – no waiting for a new version to be released.
  • Military-grade security: Ridgeline is SOC 2 Type II compliant, a third-party certification that ensures we meet the highest standards in cybersecurity and data privacy. All Ridgeline employees receive extensive privacy and security training. We utilize a zero-trust model to provide best-in-class endpoint protection, and robust security monitoring. Our dedicated security team enforces granular permissions, multi-factor authentication, encryption, SSO/SSL, threat monitoring and undergoes multiple penetration tests. 
  • Disaster Recovery: We have implemented a robust multi-regional, fault-tolerant disaster recovery strategy that allows our customers to restore operations quickly, and ensure resiliency in the unlikely event of a disaster. 
  • Elastic Scale: As the demands on the system change throughout the trading day, we leverage the elastic scale of the cloud to bring computing power to where you need it when you need it. Our system dynamically scales computing demand to drive optimal performance, eliminating end-of-day bottlenecks. No more purchasing hardware scoped for peak usage during heavy market action that goes underutilized the majority of the time. 

While it is still early days for Industry Cloud, we are bullish about the opportunity ahead. Ridgeline believes there is a better future for investment managers, and together with our partners, now is the time to create it. If you’ve read this far, maybe you’re an investment management technology and operations obsessive like us. If so, please connect with us at hello@ridgelineapps.com.

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