Improving data quality, speed & transparency | Gresham
The following is an enhanced excerpt from our recent WBR Research Report, Navigating Investment Operations in 2023 and Beyond: How the Buy-Side is Responding to Data, Reconciliation, and Technology Challenges. Download it here.
Numerous front, middle, and back-office processes and platforms rely on efficient access to high-quality data. But acquiring, validating, normalising, and enriching data when and where it is needed is manual and resource-intensive.
With 90% of buy-side investment operations leaders reporting increasing numbers of data feeds in our recent survey with WBR Research, it’s a small wonder that firms lack the time and resources to perform the task thoroughly and efficiently. As a result, many ultimately turn to service providers that offer full automation, accurate data, Tier-1 data security, business continuity, and support.
Here are four key ways outsourcing can help improve your firm’s data quality, speed, and transparency across every aspect of your investment operations.
1. Optimises your resources
As firms invest in different instruments, work within different areas of their custodians/prime brokers, and bring on fund administrators, the number of feeds they use will naturally increase. Also driving more feeds is the growing need for additional types of data to help support not only the reconciliation process but also settlements, trading, compliance, and risk by bringing in data like corporate actions, failed trades, securities lending, stock loan, finance data, and audited statements.
Yet two-thirds of firms handle data aggregation in-house, with 24% indicating their staff has to divide up their time to perform this task along with other operations work, according to our survey. Imagine the higher value work your team could focus on if they did not have to deal with disparate data suppliers; monitor feeds; normalise and validate data in different formats, or manually scrape data sets.
Data aggregators also eliminate the need for firms’ IT resources to be involved with building out connections. This is significant, considering that survey respondents named ‘relying too heavily on IT’ as their second-biggest operations challenge they face today.
2. Increases data quality and richness
In rating their organisation’s data performance, 47% of our survey respondents gave ‘poor’ or ‘fair’ ratings for their data quality. Better controls and validation processes like monitoring data completeness; data and file types; identifying missing data; varying file sizes, and changes in file specifications, all increase your data quality.
In addition, getting data sets from a wide range of sources becomes easier with outsourcing, and it makes data richer by collecting all the data points available from a custodian – not just a subset based on a particular platform, or a set of fields delivered in a SWIFT message. This is particularly valuable when downstream systems are able to intelligently integrate that data at relevant points. For example, the reconciliation tool you use should integrate relevant corporate action information to help resolve a position break.
3. Better speed, visibility, and workflows
Data needs to be validated before it moves on to the next stage. But in our recent survey, 37% of investment operations leaders gave ‘poor’ or ‘fair’ ratings for their data’s speed of availability and timeliness. Outsourcing ensures faster collection of source files and delivery of validated files, including any late-posted data.
It’s also important to always know the status of your data. Being able to view all your incoming and expected files and updates on sources means you always have full transparency of data status and can anticipate and prepare for any necessary adjustments in downstream workflows. Having timely, accurate data drives efficiency across your portfolio management, accounting, reconciliation, compliance, and other key functions.
4. Enhances data governance, compliance, and audits
Disparate and disorganised data put firms at risk of breaching regulations and overspending on storing and managing duplicate data. In an Accenture research study, 55% of asset managers said they have a data management initiative underway aimed at enhancing data governance and quality.
Outsourcing can help make data accuracy and governance more seamless. With the delivery of accurate, audited data and PDF statements, you ensure the safety and integrity of documented data records for compliance and governance reviews or audits.
Data accessibility is still a challenge
Our recent study with WBR Research revealed that eliminating data silos for critical business functions remains a key initiative – and challenge – for investment managers as they face higher data volumes and look to enhance their data transformation capabilities.
Firms will need to not only source all this data but also normalise it into any format to deliver and internally support multiple areas of the business so they are not working in silos. But data silos lock away data from users who can’t access them, which can lead to flawed reporting and decision-making.
A data service provider like Gresham can manage the data supplier relationship and connectivity, but as the owner of the data, you should always have access to your data and use it as you see fit across multiple processes and workflows.
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Download our recent WBR Research Report, Navigating Investment Operations in 2023 and Beyond: How the Buy-Side is Responding to Data, Reconciliation and Technology Challenges.
