The STOPPER Model for Digital Transformation: A Case Study of Cloud-based Digital Mutual Fund Fact Sheet


Student thesis: Doctoral Thesis

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Awarding Institution
Award date4 May 2022


Background – The global mutual fund market has increased significantly over the past years, from US$29 trillion with 86,301 funds at the end of 2010 to US$63 trillion with 126,457 funds at the end of 2020, and the Asia Pacific region accounted for 13.9% of the assets. Despite a large sum under management, enormous daily cash flow, and established stakeholders involved, certain back-end operations are still running on a somewhat rudimentary approach.

For a medium-sized asset management company with ~60 funds on sales over four regimes in Asia, using the current publishing approach can cost ~US$500,000 direct expenses on fact sheet production annually plus their in-house resources of ~4 full-time equivalents. A conservative estimate would be annual spending of ~US$1 million. The same company could spend ~US$4 million on fact sheet production globally.

A digitalized cloud-based approach has been suggested to reduce production costs, shorten the turnaround time, and improve the overall client experience. Such a digital transformation will be a "win-win-win" solution for the AMC, the fund distributors, and the end-investors. However, implementing such a digital transformation is new to this industry with no successful reference. Besides, many companies are hesitant as they are unsure if they are ready and whether they can produce the benefits as suggested. To solve this problem, this project proposed a systematic STOPPER model to assess the overall readiness for digital transformation with a feasibility pilot study by considering Strategy, Technology, Organizational Readiness, Product/Process, Evaluation, and finally, the Review of the expected benefits.

Methodology/Approach – The current fact sheet production process was examined, and a literature review was conducted on digital transformation, system development, business and technology alignment, organization readiness, and cloud computing. A survey was followed to confirm the industry's digital readiness with all leading financial institutions in Hong Kong. An independent expert assessment and an internal review were completed to validate the STOPPER model via the Dempster-Shafer Theory. The new cloud-based system was designed, built, and implemented in Hong Kong as a pilot project.

Review of the Implementation and Benefits – The study confirmed that fact sheet production inefficiency exists, and the market is ready to accept the digital changes. The issue was less about buy-in but about defining a mutual set of needs and crafting a feasible transition roadmap. It was confirmed that the model is suitable to support quick digital assessment. After the cloud-based pilot ran for two months in Hong Kong, tangibles benefits were observed.

First, the turnaround time of production was reduced by 40% from 20 to 12 business days. Second, ~US$100K for their 3rd party publishing expenses can be cut immediately, and it could scale up to ~US$250K after a full rollout. Additional savings will be realized when more markets in the region are on board (up to ~US$500K). Finally, ~1.5 FTEs can be saved after the parallel run. Further savings can be realized upon full implementation with more markets onboard.

Originality/Value – Digital economy is a megatrend, but implementing digital transformation is still a new concept with many failures. This project deals with both technical digitization and organizational digitalization. The study contributes to the knowledge sharing on digital transformation with empirical insights into the mutual fund fact sheet. The successful pilot can confirm the STOPPER model's value to support quick assessment. Finally, the digital fact sheet can be served as a best practice concept globally and open up many new opportunities.

    Research areas

  • Asset Management, Mutual Fund Fact Sheet, Digital Transformation, STOPPER Model, FinTech, Cloud Computing