Data management has become one of the key pillars of a fund in an effort to cope with the rise in amount and volume of unique data sources. While the new world of limitless data opens the door for new opportunities, many firms are deeply concerned about its impact on regulatory and reporting obligations. In order to ensure compliance with regulators, the consistency and accuracy of a fund’s data is paramount. And, while a fund might have implemented a variety of systems over the past few years to increase efficiency and access to reliable information, many managers are realizing that they are facing a whole new set of challenges in the year to come.
“…Investment in technology and data management will also need to be maintained or increased to maximise distribution opportunities, or to benefit from new opportunities offered by new technologies and social networks, and to cope with the rigours of regulation and reporting…”
Asset Management 2020: A Brave New World
Data Management Challenges
- Completeness Issues: Each system has its own data set based on the problem it is trying to solve. This would imply that the data is scattered across multiple applications, which often lack the means to communicate with one another.
- Standardization Issues: Each one of the systems may be managed by different teams that individually maintain and ingest data in different formats, volume and quality, leading to lack of standardization and referential integrity firm-wide. Since each team might choose to maintain and update the data at their own convenience, there is a requirement for increased oversight.
- Silo Constraints & Costs: Systems that work in silos and try to retrieve data for their own requirements can lead to an increase in the number of data requests, resulting in higher costs for the asset management firm.
- Scale & Volume Issues: As the fund grows, the amount of data required to be processed will also increase. To cater to the increasing volume, while there will be some dataflows that will require streamlining, reducing inaccuracies and manual intervention, there will be also some dataflows that will require tracking and monitoring. The first step towards supervision and control will be to define ownership of the data.
A Golden Copy Management Solution
One way to address the aforementioned challenges is by maintaining of a golden copy of data. A “golden copy” refers to a master version of security and reference data acting as a single authoritative source of truth for all of the applications in the asset management IT landscape. Truth in the context of security and reference data refers to a single correct piece of information that can be universally utilized for various tasks. A solution that has native abilities to source, master and distribute the golden copy of security and reference data is known as a security and reference master.
In the absence of a golden copy management solution, manual updates will have to be duplicated across multiple systems, leading to a lack of standardization. The diagram below depicts a probable IT landscape of an asset manager where there is no golden copy management solution. The arrows portray the dataflow between various applications.
Using a golden copy management solution, like IVP Security & Reference Master, firms can:
- Simplify dataflows
- Reduce the duplication of data fetch
- Remove the need for duplication of manual updates
- Streamline security creation and update workflows
- Enable easier transmission of data to other systems
The importance of a golden copy of data needs no emphasis. In an industry marked with mounting regulatory and reporting pressures, creating and maintaining a golden copy of security and reference data will help to ensure future consistency and accuracy.