Funds are seeking a controlled approach to intermediary onboarding, workflows, and document storage where they can automate oversight processes and expand comprehensive reporting capabilities.

In conjunction with Ignites, Delta Data sponsored a webcast on Modernizing Your Oversight Service Platform where Senior Vice President, Product, Colt Younger joined senior representatives from Charles Schwab and KPMG to discuss how asset managers can develop a modern, centralized system by using new data solutions to help with risk management, operational costs, and reporting.

Through the intermediary lifecycle, there are processes ripe for automation and efficiencies, including automation of invoicing, calculation of fee and revenue sharing, and allocation.

Intermediary oversight is best conducted with technology that can be issued and supported by a single third-party service provider, as it reduces the processes and systems required in place to monitor and manage the risk program.

Third-party service providers have the capability to provide funds with a single portal to better manage oversight activities, which makes oversight monitoring more efficient.

A centralized portal supports the workflow for all counterparty interactions at every stage of the intermediary lifecycle, including CRM, contract management, analytics, documents, relationships, due diligence, contract activities, and annual reviews.

It’s really difficult in the intermediary oversight space to build something internally that houses all the data elements that funds need housed, including the workflow and the fee remediation. Off-the-shelf solutions, like Delta Data’s, allow for an asset manager to have everything live in one place without the manual work. All the intermediary oversight data is connected and working together, ensuring quality reporting.

Current Intermediary Oversight Modernization Challenges for Asset Managers

Over the last decade, intermediary management and oversight systems have grown organically as a legacy patchwork of systems – CRM systems for intermediary onboarding, master data systems, transactions and positions processing systems, etc.

The result is an array of different systems that typically don’t communicate well with each other, leaving firms without a clear view of the role each is playing within the overall ecosystem.

To the extent that asset management firms are utilizing multiple systems, as explained above, their data is being delivered in disparate sources, which contributes to their current intermediary oversight modernization challenges.

If firms are able to get all the data from one source, that data can be reconciled appropriately. For example, fee schedules from the contracts have to align with the invoices firms are receiving. If the fee contracts and the fee schedules are sourced in one place, firms know they can reconcile their fees appropriately and accurately.

Currently, many firms are juggling all these disparate systems, and they’re left trying to figure out a way to consolidate all these for the purpose of more timely and accurate reporting. It’s very much a challenge when all that data is spread across multiple platforms.

Especially as it relates to intermediary oversight, many organizations are building or have already built data warehouses. The challenge they find with these data warehouses is the ability to prioritize certain data elements that are more important to them – whether it’s regulatory data, product data, etc. Building that prioritization organically will cost a firm a lot of resources. Buying an off-the-shelf solution that’s focused on oversight, like that offered by Delta Data, is a much more viable and economical direction for asset managers.

Modernize for Efficiency and Cost Savings

If a firm’s back-office processes are manual, and the people within the organization are spending 70 to 80 percent of their time trying to manually fix things due to a lack of automated pipeline or system that manages those fixes, the firm is paying for it in terms of those lost opportunity costs.

Modernizing with automated efficiencies frees up a firm’s staff for more valuable work. For example, with automated reporting and the click of a finger, firms have access in seconds to reporting that may have previously taken one to two weeks to assemble and compile manually.

There’s also an element of inherent risk that comes with manual processing. Furthermore, most organizations are resource-constrained, and they have to be constantly looking for efficiency and automation solutions. This can be found in modernizing intermediary oversight.

Build a Strong Intermediary Oversight Program Today

There isn’t a one-size-fits-all approach to risk oversight and risk programs, given the diversity among funds and fund families, as well as the evolving nature of risk in a dynamic environment and industry.

Want to learn more about building a strong intermediary oversight program? Click here to download Delta Data’s Asset Manager Intermediary Oversight eBook to gain helpful insights and best practices or contact us today to help you reach your Intermediary Oversight goals and objectives.