As the financial services industry evolves, clients and investors increasingly demand access to new asset classes, sophisticated investment opportunities like private equity funds, and bespoke services like tax optimization.

In this landscape, leaders must ensure that roles and functions on their teams address their firms' ever-changing operational needs.

One important function is that of an Operations (Ops) Developer, a financial operations professional who leverages technology to enhance efficiency on all trade-related activity. This function, often performed by roles such as DevOps Specialist, Site Reliability Specialist, or Infrastructure Architect, is typically a one-person show and the office hero (next to the person who refills the empty cold brew tap). Ops developers must navigate increasingly convoluted structures and products.

As a result, there comes a point when an ops developer’s skills are no longer a match for the growing complexity of financial operations systems. Even the sharpest ops developer can only juggle so many macros in Excel. Eventually, they will spend an inordinate amount of time maintaining and correcting error-prone Excel files. These files will grow in size, number, and complexity, inviting serious errors like misallocating trades to a large group of discretionary client accounts.

The potential risks of not addressing this issue should not be underestimated.

A single typo in a large Excel workbook can result in a cascade of errors. The target weight for a particular asset class may have been keyed in incorrectly, for instance, and overlooked by the Quality Control team. This error can grow as time passes, compounding with each subsequent trading event. Months, or even years, might pass before the error is identified. At that point, entire accounts must be rebuilt from scratch — a painstaking manual process.

Does this sound familiar? Do you have rockstar ops developers who seemingly keep things moving, migrating data just in time before markets open, narrowly dodging another close call that could have lead to the shrewdest auditors paying your firm a visit?

You can avoid costly errors by leveraging advanced platforms that reduce operational risk and free up your ops developers to focus on their core competencies.

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The role of ops developers in financial services

Often top performers, ops developers bridge the gap between operations and technology, leveraging tools like Excel macros and Python scripts to streamline processes and solve pressing problems.

Their ability to quickly develop and implement solutions, like a Python script that can scrape client data to identify accounts impacted by a particular error, can drive significant short-term gains. Without this specific script, for example, a firm might have to allocate hundreds of manual hours to review potentially impacted accounts.

Of course, relying on an ops developer for certain in-house technology functions becomes inefficient, particularly as operations become more complex. Often, just a single individual in an organization truly understands how the script operates. This adds a layer of vulnerability that may only be appreciated once a costly error has occurred.

Unfortunately, prevention is less exciting than tackling crises. Heroes are recognized after the fire is put out, but no one praises those who prevented the fire in the first place.

The tipping point: when ops developer skills aren’t suited to the task

As financial services firms grow, they encounter new layers of complexity. Adding new asset classes, investors, or funds introduces decision layers and pathways that require more sophisticated system-building capabilities.

Clients, especially in the high-net-worth space often serviced by hedge funds and private managers, increasingly demand exposure to new asset classes and jurisdictions — growth that can invite complexity.

When operations scale and Excel workbooks grow to tens of thousands of rows of data, issues can start to arise:

Version Control Slip-Ups: As projects grow, managing different versions of scripts and spreadsheets becomes challenging, leading to errors and inconsistencies. These errors can compound for weeks and months before even being discovered.
Manual Overhaul Needs: Adding new asset classes often requires substantial manual adjustments to existing tools, which can be time-consuming and error-prone.
Performance Bottlenecks: What worked well at a smaller scale fails as data volumes and business requirements scale. Financial firms are notorious for housing bloated Excel workbooks. A once agile file that opened in seconds can grow into a cumbersome workbook that takes 15 minutes just to load.
Single Points of Failure: Reliance on a few key individuals (bus factor) means that processes can break down when these individuals are unavailable.

Ops developers may be comfortable onboarding U.S. stocks into a firm’s trading platform but may be challenged, for example, by the compliance requirements of including Chinese equities. Their skills, which may be sufficient to manage simpler assets, are stretched when more complex investments demand specialized compliance or custodial treatment, for example. Additionally, the ops developer may have to allocate more and more time to secondary tasks, like manually settling international trades.

The contrast is akin to a craftsman building a single custom widget versus a factory that can produce thousands daily. While the craftsman’s approach is tailored and precise, it lacks the scalability and efficiency of factory production. Similarly, using self-made tools might work for small, isolated tasks but falls short when enterprise-level robustness and reliability are needed.

This is where the skills and practices of professional software engineers come into play. They provide scalable, efficient, and reliable solutions that can handle the increasing complexity and volume of operations in growing financial firms.

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What overwhelmed operations look like

Consider this scenario: A mid-sized hedge fund relies heavily on a team of ops developers to manage daily operations.

Initially, ops developers implement a series of complex spreadsheets to handle trading workflows and reporting. This works until the fund introduces real estate exposure.

Including real estate doesn’t just add data; it brings new criteria and requirements that didn’t exist on the platform previously.

The increased complexity begins to strain existing systems, resulting in a misallocation across all discretionary client accounts. The firm’s problem resolution department spends weeks manually correcting accounts.

Worse still, the CEO and CFO have to send letters to clients detailing the issue.

Despite the impressive internal system the ops developers had built, they weren’t armed with the tools to handle more complex assets and higher volume. Had the ops developers used purpose-built tools they could have onboarded the new real estate asset class without issue.

Leveraging specialized tools

Ultimately, growing demand takes ops developers away from their core competencies: developing custom automated processes, integrating new systems, optimizing features to suit business needs and context, and managing firm infrastructure.

Financial services firms should consider leveraging specialized tools designed to handle complex system-building needs that manage the intricacies of modern financial operations and provide several advantages:

Scalable: Designed to manage large and diverse data volumes and complex workflows, these tools can scale with the firm’s growth.
Reliable: Built with best practices in software engineering, they offer robust error handling, monitoring, and alerting systems to prevent and quickly resolve issues. This enables firms to identify problems sooner, preventing errors, like incorrect trade settlement, from compounding.
Efficient: By automating routine tasks and providing pre-built models, these tools free up ops developers to focus on higher-value activities, like implementing bespoke security solutions that leverage their business-specific knowledge.
Dependable: Running a multi-day tactical asset allocation call across tens of thousands of discretionary accounts? Modern tools can give you confidence that your trades will settle as intended and not be disrupted by bloated and corrupt Excel files. In other words, peace of mind.

The optimal role for ops developers

With specialized tools handling the heavy lifting of system complexity, ops developers can be better utilized in roles that maximize their unique skills and business knowledge.

Customization: Tailoring pre-built systems to meet their business's specific and unique needs, ensuring the tools align with operational workflows and business objectives. For example, self-service APIs can enable them to autonomously access and manipulate data.
Configuration: Updating mappings, configurations, and features within the system to adapt to changing business requirements. Again, ops developers should be focused on work that is unique to the firm.
Innovation: Identifying and implementing process improvements that enhance operational efficiency and drive business growth. The best ops developers possess a holistic view of the firm’s needs and know where effort should be focused to generate the most value.

Divide and conquer

While ops developers play a critical role in enhancing efficiency and solving immediate problems, their skills are best utilized within a framework supported by specialized software tools.

Excellence in financial operations requires a strategic approach to talent allocation. By embracing advanced tools CTOs and CDOs will free ops developers to focus on what they do best — using their business and context-specific knowledge to drive operational excellence within the organization.

Change can be hard. But don’t let trepidation about implementation stop you from exploring specialized tools or even moving to a modern platform that enables your team to focus on where they can excel.