The Investment Book of Record, commonly referred as IBOR does not have a relatively long story and its concept is not that compelling. It has been around for quite some time while starting to gain interest on all over the globe. The idea that drives IBOR to be an essential priority for a number of investment management organizations is the term “real-time” or “up-to-date”. It has been designed to provide portfolio and investment managers real-time visibility to make sound decisions, and offers a comprehensive, intraday view of a firm’s position based on constantly updated real time events. This enables the firm to efficiently manage issuer and counterparty exposures as well as forecast investments and security positions.
IBOR’s tremendous advantage is that it automatically centralizes a firm’s holdings data, process trades, corporate actions, and produces updated reports in real time. Also, aggregating positional data for accurate start-of-the-day and intra-day in a timely fashion Also, with IBOR, a firm will be freed from the manually grueling and time consuming tasks. An investment book of record would combine all positions and accommodate all data. The result is a single version of truth from accurate and efficient data management stemming. You will be able to have a comprehensive view of your day.
Regarding its implementation, determining the functional requirements of both the front and back office systems must be carried out. It will be used by many areas of the organization. These relevant requirements are needed to ensure that the organization will gain maximum benefit from IBOR. Keep in mind that implementing IBOR is not a trivial task to undertake and will require careful planning and thorough analysis. For others, decisively opting to outsource the entire IBOR lifespan to a third-party service provider seemed to be a popular choice though there are risks and disadvantages associated with it. Investment managers who prefer outsourcing their middle and back-office are more exposed to experience complications throughout the process of gathering data than their colleagues that work in-house. Another drawback why outsourcing IBOR is not an excellent choice for many firms is that vindication for IBOR can somehow provide a degree of independence from outsourced relationships. Over-dependence on third parties and especially outsourcers proved to be questionable.
An internally built solution, or commonly known as ”in-house”, is also an option that is widely debated. Many business challenges arise even in the time when IBOR was not officially branded as a solution and made some organizations to develop strong in-house applications, working out the cause of the problem. However, implementing this type of initiative can be time-consuming, expensive and the risks and costs of unable to fully ensure constant access to up-to-date data are disadvantageous.
Apparently, the best option in implementing investment book of records widely depends on the nature of the organization or firm since it is a firm-wide initiative. You can only call an implementation successful when all the areas of a firm participate, including the sharing of benefits.