Buy Side Revamps Data Management02.29.2012
Validating data at the source is paramount.
Asset managers are grappling with how to automate data management processes to ensure that data has been properly vetted before it’s disseminated to the public.
“Validating data at source ensures that once a data point is corrected, it stays corrected,” Ronan Brennan, chief technology officer at MoneyMate, told Markets Media.
“The impacts of getting it wrong can be severe,” he said. “The level of financial penalties for misleading clients due to delivery of inaccurate or inconsistent data is significant.”
MoneyMate’s Fund ProductMaster automates the process around fund data management providing expertise and intelligent workflows to manage it.
It maps and defines data ownership, provides a framework and complex business rules, and exception management controls to ensure information is fully validated and readily accessible, according to MoneyMate.
Preparing product data for distribution to the public domain has traditionally involved lots of manual processes.
Data comes from a variety of sources both inside and outside the organization, and it needs to be aggregated, normalized and validated so that it can be placed in the public domain via fact sheets, websites, client reports, presentations, RFPs etc.
Too often, a formal data quality management process and supportive technology framework is not employed to prepare product data for publication therefore inconsistent data can appear in different areas.
“The as-is data management process itself is cumbersome, highly resource-intensive and often involves manual processes,” said Brennan. “Exposure to manual processes means exposure to the risk of errors.”
Nearly 80 percent of buy side participants recently polled by MoneyMate said that automating their firms’ data management processes were very important, and over 60% cited regulations as a key driver.
In a similar poll a year earlier, 80% of respondents said they were still unprepared for regulatory changes. In the U.S., 75% of firms rated Dodd Frank as a major concern.
“Last year, respondents were unsure how they were going to have to make changes and prepare to comply with regulation as they were unsure as to what exactly the requirements would be,” said Brennan. “It appears that this year, they are getting ready and regulation is a key driver for change.”
Funds and advisers that market themselves as having an ESG focus would have required disclosures.
Concerns about greenwashing continue said American Century Investments.
Direct clearing offers more efficient management of cash and securities collateral.
European asset managers have upcoming compliance and regulatory disclosure obligations under SFDR.
ESG funds remain statistically cheaper and better performing than non-ESG peers.