Asset Managers need a Smart Data Highway

Asset Managers have one primary mission; to use data they have to make wise and timely investment decisions for their portfolios to create positive relative or absolute return for their client investors. They need quality, accurate, comprehensive and timely data to make informed decisions in support of their clients.

Whether this Middle Office data management & control function is outsourced or not, the critical need for it remains.

Every asset class has its own detailed data requirements as input for making those investment decisions, and front-end portfolio modeling & management systems require clean and timely data from a variety of data sources.

In pursuit of the “single source of clean data”, Asset Managers embarked on the implementation of centralized data warehouse ‘CDW’. Not only did the CDW capture & maintain clean data, but it also became the source of clean data for other systems.

However with the successful implementation of CDWs, the delivery of the data (sourced cleanly from the CDW) and the execution of the operational processes of the receiving system remained manual, creating a cumbersome and costly overhead.  What’s missing?

An smart investment data highway.

An smart data highway enables clean, enriched data to be maintained and propagated throughout an organization with nimble two-way data flow, and with the enforced discipline centralized operational processes bring, along with dashboard user-interface command & control.

Every asset class has its own nuances, with a raft of detailed data requirements needed for Front Office portfolio-modeling & risk management systems – all requiring clean and timely data from a multitude of sources with daily, monthly and quarterly feeds as appropriate.

Furthermore, the specialized use of Front Office portfolio-modeling & risk management systems, created a richer and more complicated technology environment with multiple systems supporting a single functional business unit.

To harmonize the complex environment, Asset Managers need an Intelligent Investment Data Highway – a rules-based centralized process around complex, multi-sourced data from disparate systems – ensuring disciplined control of data timeliness, enrichment and validation.

Critical Data Requirements

In a typical Real Estate portfolio, data required for the Front Office includes:

• • Accounting Data

• • Budgets Data

• • Cash Flows Data

• • Valuations Data

• • Debt Data

• • Detailed Property Data

• • Lease Data

Other asset classes such as Fixed Income, Equity, Privates, Alternatives, Commercial Mortgages, etc. each have their own complex data requirements and data source profiles & frequencies.

The ability to provide accurate and timely data to the Front Office continues to grow in complexity and urgency. Top contributing reasons are:

• • Performance, Attribution & Analytics

• • Risk Management

• • Client Reporting

• • Compliance & Regulatory Changes

• • New Asset Classes/Instruments

Complexities of Data Management and Governance

Data management and data governance are tough to get right and often result in an escalation of resources, manual processes, use of spreadsheets and other error-prone tracking tools. There are also an increasing number of new vendor systems to consider on the front-end. The implementation of a centralized data warehouse, although critical for enterprise reporting, is not sufficient. The warehouse will not likely provide the operational intelligence required for rules-based processing, remediating data breaks, and sequencing of data delivery to the Front Office.

So, where do we go from here?

• • How do we align our thinking so that the Middle Office is considered and valued as a data governance and data management function at its core?

• • What should a world-class Operations group deploy to improve the quality, timeliness, propagation and control of investment data?

• • What is the business case for spending money wisely in this critical support area so that Front Office decision-making can be equipped and informed with quality data on a timely basis?

• • How can we help influence change so that this key area within Operations is protected from potential short-term cost cutting until medium-term streamlined solutions can be put in place? Informed investment decisions can only be made with quality data.

A Smart Investment Data Highway provides the operational processes for managing data to be centralized in the context of business rules and Front Office requirements. It will:

• • Help organizations make the move from manual processes and side spreadsheets to automation – using automation and cloud services which will reduce costs in this critical area.

• • Enable “Plug and play” adapters and API’s to the most common data source types and Front Office vendor systems which will allow for scalable growth (portfolios, asset classes, security types, reporting etc.) on a timely basis with ease of integration.

• • Deliver a visual dashboard and the logic of your operations built into the highway infrastructure which in turn will make handling errors routine.

Contact Us  to learn more.