Many financial services firms are reexamining their data management processes and adopting more comprehensive approaches as part of a wider technological transformation.

This transformation is particularly necessary in mutual fund/pooled investment data. The complexity and the volume of mutual fund data continues to increase, and how all that information is packaged varies wildly, often leaving firms to spend more time trying to organize data than analyzing it.

The amount of effort, time, expense, and personnel that is put toward verifying data has long been an industry challenge.

Importance of Data Management

In an interview with leading industry publication Ignites, Bret Bange, Delta Data’s chief revenue officer, discussed the importance of data management solutions and the benefits of a system that delivers off-the-shelf functionality tailored specifically for pooled investments while allowing flexibility in tailoring the system to meet any unique needs of an organization

For financial services institutions, gaining control over pooled investment data is a fundamental imperative that affects key metrics like customer service, brand reputation, compliance initiatives, and competitive advantage. Without it, duplication of effort, inconsistent data quality, and limited usability will continue to affect costs and efficiencies throughout the enterprise.

    Disparate Sets of Data

      Any enterprise data management application for pooled investments should provide functionality around processing and managing all of the unique data sets and multiple sources.

        Most firms receive fund data from multiple sources. The data requirements for maintaining a mutual fund on a distribution platform are vast but can be categorized into primary data sets of Price Rates (NAVs), Dividends, Corporate Actions, and Reference Data, which tend to come from various sources, including third-party industry data suppliers like Morningstar, ICE, Reuters, as well as the DTCC and NASDAQ.

          In addition to mutual fund data sources and third-party data suppliers, most firms incorporate proprietary data that needs to be captured and deployed alongside the industry data feeds. There are also data sources related to client/counterparties and trading and clearing partner information sources.

          Integration With Other Systems

          Many firms struggle with the onus of updating the same data on multiple legacy systems, leading to inefficiencies, manual errors, and potential risk with incorrect data. One of the costlier aspects of implementing a data management solution is interfacing the centralized Gold Copy of data with all the downstream systems that consume the data.

          When comparing values across multiple sources, if the values aren’t normalized to a common value, the result is unstructured and uncategorized data that has no reporting merit.

          This cost can be minimized if the data management solution is capable of curating and cleansing the data to create output files that are compatible with the requirements of the various downstream applications. This data curation and cleansing process simplifies the integration and reduces the expense for firms.

          Centralized Data Management Solution

          A centralized mutual fund data management system acts as a ‘hub’ and allows for all data flows from whatever source and in whatever format, to be incorporated seamlessly without any disruption to operations, improving data quality and consistency.

          This centralized solution should be able to ingest, reconcile, standardize, normalize, cleanse, enrich, compare/challenge, and manage the mutual fund data coming in from the company’s data sources.

          A centralized ‘hub’ to master all reference data with complete visibility of all data and all data processes ensures optimal accuracy and absolute consistency. This includes data requests, feeds, validations, exceptions, and publishing multiple ‘Gold Copy’ data sets.

          Data management modernization is at the core of a firm’s technological transformation. Employing a centralized solution to manage data gives firms the ability to focus on results and be much more proactive with their data, utilizing better processes and more effective technology.

            Click here to learn Delta Data is helping top financial institutions modernize their data management and simplifying the servicing and trading of assets in pooled investment products.