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The Power of SaaS for Stewardship Management

The Power of SaaS for Stewardship Management

As investment stewardship is further embedded in regulations and client expectations, effective systems to manage, track, and report these activities are crucial. Some build in-house solutions, but many turn to specialised Software as a Service (SaaS) providers. This blog highlights why SaaS is an ideal choice for integrated stewardship management, offering expertise and optimised online solutions for investors.

October 3, 2023

Stewardship, active ownership, and engagement are all terms that now investors experience as part of their day-to-day work. They have become enshrined in regulations, codes of practice and client mandates, placing important expectations on investment teams. 

Where just a few years ago it was possible to get by with some anecdotal engagement examples and in prospectuses and annual reports – today expectations are much higher, and stakeholders will scrutinise assertions for quality, timeliness and the absence of greenwashing.   

This means that it is now vital for investment firms to have proper systems in place to manage, track, measure, and report on the engagement activities being undertaken on their portfolios. While some will build or adapt a solution in-house, others will be looking to Software as a Service (SaaS) providers for help. Making an informed decision on the right technology can be difficult with so many considerations at play.

We believe that SaaS is the best approach for integrated stewardship management, which is why we created the Impactive Platform. 

SaaS providers exist because they have dedicated all their energy and expertise into solving a specific set of problems, delivered through an optimised online solution to their target market. In this blog, we look at why investors should seriously consider using a purpose-built SaaS stewardship management solution.

First, what is SaaS?

It may sound like another buzzy tech term, but SaaS has seen a lot of growth in the last twenty years, powering a significant amount of the business processes at enterprises of all sizes. Despite this, the investment management industry has been slower to adopt SaaS for a number of reasons, including the reliance on legacy technologies, and concerns about risk and data security. Recent trends indicate a shift, with 62% of asset managers in a 2021 Funds Europe survey naming cloud-native solutions as a pivotal part of their future IT strategy, including SaaS.

Unlike traditional software deployment, which involves purchasing, downloading, and installing applications locally, SaaS offers a subscription-based, cloud-hosted alternative accessible via the internet. This shift transfers the burden of software management and maintenance to remote providers, enhancing accessibility and flexibility. According to McKinsey, "asset managers are more likely to build resiliency and meet today’s challenges if they pursue new efficiencies in maintenance spending—for example, moving on-premises technology to the cloud—and use the freed-up resources to invest in revenue growth opportunities".

So how can SaaS power stewardship management?

Here are ten compelling reasons why investors should consider adopting purpose-built SaaS stewardship management solutions:

1. Sleek data and systems integrations 

Stewardship doesn’t (or shouldn’t!) happen in a vacuum. Investors engage with companies or other entities because they are concerned about specific areas of performance or broader thematic or systemic issues. As such, stewardship needs to be supported by relevant data and context such as news, in-house and external research and ratings, investment notes as well as voting information. Most SaaS products feature built-in APIs and integration points, simplifying integration with other software products and internal and external data sources. This not only saves time and effort for development teams but also ensures compatibility with other popular software solutions, further streamlining integration.

2. Better collaboration

Successful ESG integration and stewardship demand seamless information flow among different departments and teams for informed decision-making and improved workflows. 

Purpose-built stewardship SaaS solutions, such as Impactive, have been designed specifically to unite teams. They include built-in communication and collaboration tools, such as task management, notifications, and file sharing. This fosters a workspace where ESG and investment analysts can collaborate efficiently, while client-facing and reporting teams can access the information they need in real-time without cumbersome email exchanges that consume time and energy.

3. Rapid onboarding for immediate impact

If you haven’t already established an engagement management process, you’re already behind. 

The longer investment firms operate without systematic, evidenced, and outcomes-led engagement management, the more exposed they will be to regulatory and business risk. 

A purpose-built SaaS solution can be adopted swiftly, as there's no need for the lengthy build, installation and configuration processes associated with traditional on-premises software. Investment firms can harness the benefits almost immediately, saving time and realising a faster return on investment.

4. Access to continuous innovation

SaaS introduces investment firms to a world of continuous innovation. With cloud-based deployment, users gain immediate access to product improvements without the hassles of traditional software upgrades. A dedicated stewardship SaaS solution such as Impactive has a rapid innovation cycle, which includes regular releases, reflecting changes in the regulatory and tech landscape or enhancements based on client feedback. Investment firms committed to staying at the forefront of ESG can benefit immensely from this agile approach to software evolution.

5. Enhanced flexibility

Furthermore, SaaS applications are highly customisable to meet the specific needs of investment firms. Traditional software solutions often require separate modules or add-ons to achieve the required features and functionality. With SaaS, investment firms can usually access all needed features within a single, flexible package.

6. Security and reliability

SaaS solutions are renowned for their enhanced security and reliability compared to on-premises counterparts. SaaS providers invest heavily in security infrastructure and employ dedicated experts to ensure the safety of data. Robust disaster recovery plans ensure data availability even during unforeseen disruptions, instilling confidence in users.

7. Reduced administration time and cost

The adoption of SaaS liberates investment firms from the burdens of infrastructure and system management. SaaS providers take on the responsibility of maintaining the security and scalability of the cloud-based environment, allowing investment professionals to focus on core business functions.

Further, SaaS's absence of substantial upfront licensing fees significantly reduces the financial barrier to entry for investment firms. A lower initial financial commitment eases the transition to ESG stewardship tools and enhances adaptability in a rapidly evolving environment.

8. Focus on great UX

At Impactive, we firmly believe that user experience (UX) is paramount. A system that fails to deliver a great UX and interface will not reach its full potential. The right SaaS design and development teams prioritise UX, investing substantial effort into making workflows and the front-end experience as seamless as possible. After all, who wants to spend time interacting with an interface that sucks?

9. Customer-centricity

Asset owners, particularly in the UK, are under more pressure from regulators to strengthen the oversight of their asset managers’ stewardship activities on their behalf. We heard the challenges some of the leading pension schemes are facing during our July 2023 webinar with representatives of Phoenix Group and Nest.

Asset managers can show their commitment to their asset owner clients by providing them with more granular, timely, and decision-useful information. This is made so much easier by using a dedicated SaaS solution such as Impactive, which allows for instant report generation, as well as the ability to connect data to a purpose-built client portal.

10. Elevating brand power

By embracing a modern approach such as SaaS, asset managers and asset owners can demonstrate that they are evolving with digital technologies, striving to deliver cutting-edge services to their stakeholders. Investment firms can leverage the inherent agility and innovation of SaaS to differentiate themselves and offer a better experience to their clients.

What to look out for when choosing a SaaS vendor

Not all SaaS is created equal, and it’s important to evaluate the key aspects of any vendor’s offering. The list below provides some of the key considerations to bear in mind, and how we at Impactive have addressed them: 

  • Will I be able to customise the SaaS to my specific needs?

Most SaaS vendors offer a standard service that caters to the majority of users. They also offer custom/enterprise packages whereby you clients have the opportunity to discuss the requirements and gain an understanding of the feasibility and additional cost.

At Impactive we understand that one size doesn’t always fit and have built our solution with customisation in mind.

  • Will my data be secure?

Data breaches have happened at some large, well-funded, and sophisticated SaaS providers. No one can guarantee absolute safety however they can adopt and implement the best practice controls and technology safeguards.

At Impactive data security is paramount which is why we have carefully chosen our cloud data partners. We have data encryption at rest and in transit as well as strong authentication measures. We are in the process of completing our ISO27001 certification which is the international standard for data security.

  • What happens if something goes wrong?

As we know customer service and support differ from company to company. When assessing a vendor look carefully at its customer support policy which outlines its response to different situations such as unavailability and bug fixes, and how robust its business continuity is.

Impactive operates a customer-first policy and will quickly respond to any issues or queries clients might have. 

  • Is it difficult to onboard and off-board?

With the vast majority of SaaS, it is really quick and easy to get going, which is a great advantage. Where there is a more involved setup, particularly with integrations that require some manual effort there may be additional time required. With regards to off-boarding, the advent of GDPR data portability has made this much easier and you will be able to take your records with you. Be aware that the format will be technical and may require adaption to load into another system or service.

At Impactive we have made onboarding straightforward and in the very unlikely event that you would want to move to another system, we can support you all the way. 

In conclusion

The adoption of purpose-built SaaS stewardship management solutions represents a pivotal step forward for investment firms striving to meet the escalating demands of stakeholders, regulators, and clients. These solutions offer the agility, flexibility, and efficiency needed to excel in today's dynamic investment landscape, ensuring that stewardship practices evolve from mere compliance checkboxes into strategic advantages.

If you have any questions or comments, we’d love to hear from you! Get in touch with us at info@impactive.pro

Impactive provides asset managers with a dedicated cloud-based solution to track, report and analyse all portfolio engagements for improved collaboration, transparency and compliance with global regulations. Asset owners have the additional benefit of a unified system to oversee their external managers’ stewardship activities in a clear, comparable, and decision-useful way.
Book your 30-minute demo here to see how it can transform how you work.

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