Fund administration is currently grappling with significant digital challenges. A study by EY Luxembourg reveals that the industry achieves a digitalization level of only 1.6 out of 5 points. This under-digitalization is particularly concerning in a continuously growing market with increasing complexity, making it difficult for regulated companies such as the Alternative Investment Fund Manager (AIFM) to properly meet their regulatory obligations. The AIFM is responsible for every decision within a fund, and inadequate fulfillment of compliance tasks can lead to long-term reputational damage and significant existential risks, including the complete loss of the AIFM license.

The Importance of Digital Maturity

Asset servicers that accelerate their digital maturity are more likely to keep pace with market growth and, moreover, deliver a first-class client experience while outperforming competitors. Despite these advantages, many companies face challenges in their digital transformation efforts for a variety of reasons.

Challenges of Digital Transformation

1. Fee and Cost Pressure: Intense price competition and shrinking margins lead many fund administrators to focus on short-term solutions rather than developing holistic digitalization strategies.

2. Legacy Systems: Many companies operate with outdated systems that no longer meet modern requirements. This hampers the integration of new technologies and hinders digital progress.

3. Fragmented Technology: The use of various poorly integrated tools results in digital friction and slows the adoption of advanced technologies.

4. Manual Processes: Numerous business processes remain heavily manual. Automating these processes and restructuring associated personnel delays digital transformation.

5. Unstructured Processes: Services are often conducted through unstructured communication channels like email, leading to inefficiencies and communication problems. This phenomenon is referred to in the study as "email spaghett," which slows down service delivery.

How TALIC Solves the Problems

TALIC is an AI-powered, single-source-of-truth platform designed to help asset managers navigate the increasing complexities of AIFMD compliance. By automating everyday tasks the solution reduces law expenses and speeds up workflows. At the same time, an AI assistant offers employees guidance throughout every stage of the fund’s lifecycle, reducing the risk of compliance violations and enhancing the platform's usability.

To facilitate seamless integration and overcome the challenges asset servicers encounter when adopting a SaaS solution, TALIC is designed so that users do not need to rely on a new user interface. Instead, they can interact with the AI assistant through communication channels such as email or Slack to feed data, query information, or draft documents.

Conclusion

The under-digitalization of fund administration poses significant risks and challenges but also presents opportunities for innovation. By addressing key obstacles and including cutting-edge solutions, the asset servicer can enhance compliance, efficiency, and client experience. TALIC addresses this need by offering an easily integrable solution that improves data visibility and usability to support asset managers in their everyday fund administration tasks.