Brokers Seek Unified Systems

Terry Flanagan

Marrying data and business apps is the best way to meet compliance challenged.

Broker dealers are looking for new business systems architectures to help them avoid being swamped by new regulations and compliance demands,

These architectures attempt to provide controls by tying together systems and data into a unified platform.

“Unifying data and systems is one of the only initiatives that can provide substantial benefit for front, middle, and back office operations,”  David Fetter, CEO of Quadron Data Solutions, told Markets Media.

New regulations focused on the financial industry are aimed at increasing transparency of information and promote investor protection.  The new rules are found in the Dodd Frank Wall Street Reform Act and other regulations, such as FINRA rule 2090 (know your customer) and FINRA rule 2111 (suitability).  Firms will need a source of “unified data and systems” that feeds information through the front, middle and back office to comply.

“Whether addressing compliance issues, middle office inefficiency, technology expense, or wanting to offer advisors effective tools for better managing their clients broker dealers should consider a strategic approach to unifying data, systems, and workflows,” Fetter said.

Account opening is a logical starting point for data management, offering tremendous benefits to the advisor and customer experience, while simultaneously ensuring that all required data is obtained early in the process and retained for ongoing compliance and account management needs.

Any new implementation should include a measure for success. Not-in-good order (NIGO) rates are indicative of the problems in an application life-cycle that might stop a new account from being processed.

“If a company has a good NIGO rate, their applications are processed quickly without being kicked back for more information,” said Fetter. “Missing information, illegible handwriting, and missing forms, affect a firm’s ability to have their accounts considered in good order.”

Broker dealers can gain insight into the improvement of their data integrity and its effect on processing costs by measuring the movement of their NIGO rate.

Quadron Data Solutions provides an integrated applications and data architecture for broker dealers. Its Q-Suite offers a modular array of business apps, including AccountQ (account opening and management), Advisor! (client reporting and managing advisor’s book of business), ComplianceQ (compliance monitoring and reporting), EarningsQ (compensation and revenue management), and ReportQ (business analytics and reporting).

Quadron’s data warehouse, Quadron DataPro, provides and upgrade path for outdated legacy architectures and disparate systems operating in silos, the company said. It manages the collection and normalization of external data from disparate sources such as clearing firms, mutual funds, institutions, as well as internal proprietary data.

“The year 2011 was a difficult one for the financial services industry, but firms can prepare for a more successful 2012 by understanding regulatory expectations which demand unified data and systems,” Fetter said.

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