Achieving the impossible - Building a golden source of truth

Is how you manage data the key to unlocking a new competitive edge?

by Louise Yoo
03 March 2020

The data burden facing asset managers is becoming increasingly evident.

While it’s near impossible to quantify how much the fund management industry is contributing to the 2.5 quintillion bytes of data created every day, the sheer volume of data requirements and transfer of data by asset managers is most definitely on the rise.

The number of data sources is increasing too, as more and more stakeholders are vested in the supply chain – from administrators to technology vendors and distributors – and data requirements are everchanging – think jurisdiction-specific regulations, industry standards and developing taxonomies such as ESG.

Furthermore, investor demand for greater accessibility and transparency of information and increasing cross-border fund flows are adding to the challenge of data management for today’s fund management industry.

Data management encompasses all activities associated with data acquisition, validation, storage, maintenance and processing. What was once a support activity is now demanding more attention as the impact on value creation has become more apparent.

Quality data is the lifeblood of a winning investment proposition and distribution strategy – both at an institutional and retail level. The accessibility, reliability and timeliness of data have profound effects on an asset managers ability to create value, or destroy it.

The power of data and the impact of data management simply cannot be ignored. It is the new competitive differentiator.

And the ultimate goal is to achieve a golden source of truth.

What is a golden source of truth?

It is really an amalgamation of two things:

  1. A single source of truth, and
  2. A golden record

Or a new buzz phrase of businesses looking to drive growth and make decisions based on accurate data. As one consultant describes it:

“The golden version of truth is a single, well-defined version of all the data entities in an organizational ecosystem.”

Whatever the case may be, it’s at the centre of operational excellence for fund managers.

The goal is to build an enterprise architecture that maintains a single source of truth. The Golden Record (or master source) is maintained through integrations and workflows that allows for the transfer of data without creating duplicate records.

Fund managers operating in multiple jurisdictions, with different regulatory requirements, languages and distribution partners need a robust centralised platform that allows them to track their funds, manage fund data, and disseminate fund information and documents.

The benefits are profound

Fund managers can imagine a world where they can manage their fund from launch to closure from a central content hub of data and documents, while improving data governance, regulatory oversight and operational efficiencies.

So how does one achieve a golden source of truth.

It begins with identifying your data sources and stakeholders. Map out your ecosystem and start drawing out the directional flow of data.

Then, choose a system to build your golden source of truth. Now that you have a thorough understanding of your ecosystem and data flows, and the system capabilities, you can start to define the workflows to connect your disparate sources of data. Then, define the processes, data owners and how you seek to enrich your data – whether it’s through quality checks, automatic validations or employing third-party data vendors and calculation engines. Ideally, minimising manual intervention is key to reducing the risk of error.

Finally, we can talk about data protection. As one of your most precious assets you will want to define who has access, authority and how you are going to set up audit trails to ensure that the data you manage remains a value-add, rather than turning into a compliance breach or error someway down the supply chain.

Building a golden source of truth is no longer impossible but a concerted effort is required to achieve operational efficiencies as your distribution networks continue to widen and the risk of data quality failure increases.

Contact us to find out more about our data management solution for asset managers, publiFund, an integrated content, workflow and document management tool that helps you meet your regulatory obligations and drives operational efficiencies.