May 23, 2013
According to the recent MoneyMate Data Management 2013 survey, regulation is the top driver of new data management projects for asset managers in 2013, with 68% of respondents flagging it as a key driver.
This was closely followed by client servicing, with 60% of respondents indicating that demand for better client service was driving demand for new data management initiatives.
Interestingly, driving efficiency was flagged by only 30% of respondents. This tallies with the view that strategic spend is outweighing tactical spend in 2013.
I was encouraged to see client service polling so high in this survey. I believe it validates my long-held view that the reason we focus so heavily on applying good governance to client facing investment product data is because data is the oil in the distribution engine for many investment managers – feed the engine with poor quality oil (data) and within a short space of time that engine will seize up.
The indication that 68% of firms’ new initiatives are driven by regulation correlates tightly with what I hear on the ground – many firms are cognizant of the fact that transparency is something that is going to have to be embraced. Those that see this as a strategic opportunity are positioning themselves now for even greater demands for data in the to-be regulatory landscape that is developing in front of us.
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Posted by Ronan Brennan
April 17, 2013
I was on a panel at the recent TSAM UK 2013 conference in London – where the topic was “Good data governance – the challenges for the business“.
On the panel I was joined by Phil Tattersall (Simitas), Steve Clark (KPMG) and Andrew Barnett (Friends Life Investments), our moderator was Chris Johnson of HSBC Security Services.
One of the topics we discussed on the day was around governance frameworks, what had we seen in practice that worked and to what extent was governance being driven by business (as opposed to IT).
One of Phil’s comments still resonates with me today “Data governance is not data management” – why so? …unfortunately the perception that governance = management is something I come across too often. Data governance is what ensures that data management happens properly i.e. in a way that is aligned with the original goals and terms of reference for the initiative under way. Data management professionals need to clearly understand the difference between governance, stewardship and architecture!
Another of Phil’s points was also very salient ”treat data as an asset” any of you that read the recent Citisoft white paper “Data is the new oil” will see the connection – data is something we need to value, it can often be presented in a very raw form, and like oil, it requires careful refinement to extract maximum value. I am fan of the data and oil metaphor myself – from a slightly different angle though, I often refer to data being the oil in the distribution engine for investment managers – feed the engine with poor quality oil (data) and within a short space of time that engine will seize up.
Steve also had some good points in the above discussion, he stressed the importance of setting out the “policy and procedures in governance” and the criticality in “defining good data quality” and the measurement and feedback that should exist in your process management framework to drive improvement.
With respect to whether governance should be driven by business or IT, Andrew indicated that in his business “data teams are made up of business people” – myself and the rest of the panellists agreed that data governance initiatives should be driven by business, but that clearly IT have a role to play and their involvement will always help.
My own view was that frameworks for governance are important, in the sense a framework is anything that providers structure and guidance to the application of governance to any data management initiative. This ‘structure and guidance’ can take the form of technology that assists the empowering of the stewards to manage data in line with the stated strategies and principles as laid out by governance. Technology can also assist in driving ownership, accountability and transparency into the process. The key point though is not to overly rely on technology. Technology does not fix bad quality data – that is what good data management professionals do – we just need to enable them to do their job more effectively.
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1 Comment | asset management, Data Governance, Data management, Data Quality, distribution, Event, Technology, transparency | Tagged: data governance, data management, Data Quality, TSAM | Permalink
Posted by Ronan Brennan
January 15, 2013
It is not without reason that I chose “organization” as the first theme in this series of blogs on a blueprint for setting up a program of governance for effective management of Investment Product Master (IPM) data in an asset management firm – every firm is different. Each firm has its own unique blend of culture, history and esoteric business practices that mean that there is no cookie cutter type solution to implementing a program of governance for IPM data. This is why having a clear understanding of the mechanics that make your organization tick is a key element in kick-starting the activities needed.
Some key questions that need to be asked:
- Who in the firm cares about the quality of the product data being pushed into the market about your funds? I would expect the answer here to include at least someone at C-Level, probably the COO and potentially the CFO. I expect the Head of Distribution will care passionately about the quality and timeliness of information being pushed to prospective and actual clients. I expect the Risk/Compliance department to care – after all this is their job! I would expect various operational heads will have a keen interest – such as, Head of Product, Head of Performance/Attribution and finally, I expect that someone in the Treasury function whose role is oversight of back-office accounting data flows i.e. price and income would have a vested interest. For sure, there are others that belong in this group but I am trying to keep this at a high level.
- Is there one person or team in the firm who is directly accountable and /or responsible for the quality of information published about the firm’s funds and investment accounts? I often get a variety of answers here – sometimes you will find there is a data governance team and/or Chief Data Officer / Czar in place, but more often than not you will find their effective remit is actually quite limited in scope and the breadth of the data they are responsible for does not extend to your own Investment Product Master data – why is this? I think it is because firms believe this data, being their own, must be of good quality. The reality is that this data is often cobbled together across a disparate range of in-house silos, many of which are collections of Excel macros and Access databases, mixed in with some actual systematic feeds of data from systems that have not been manually altered. Sometimes, you will find that in fact there is a person or team with direct responsibility for the product data – quite often the Head of Marketing, or the Head of Performance.
What is the goal here? Well if you have found through your questioning that there is neither a person nor a team who is directly accountable, nor any team that is responsible – you need to work through the list of people who ‘care’ to create a initial committee or steering group to run your governance program. This is the most basic step – the formation of groups within your firm who will take the initiative and drive this forward.
Whether the program is managed by committee or by a specific person depends on the organizational culture – do whatever works in your firm. But, without a doubt, this initiative will fail within weeks if you do not have executive sponsorship and full engagement from at least one C-level executive.
One thing I would stress – particularly if your firm already has a data governance function – if this existing function does not have a specific and obviously executed mandate to take and apply control to your investment product data, then set up a new team/program to take on this very specific mandate. Too often you will find that there is a broad program of activity in place – but that it is highly focussed on the investment books and records and the data/systems that are feeding into investment decisions made within the trading and portfolio management teams. There is often little or no focus on the product data that the firm is sending out to the public domain and on which the firm’s clients are making (or not making) decisions to invest in the firm’s own funds (or accounts).
Certainly if I were the Head of Distribution, Client Services, Marketing or Compliance/Regulation - this would be very high on my agenda. The sales and distribution engines need good quality and timely data to compete for new assets and retain existing clients. Remember my earlier post, data is the oil in the sales engine!
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4 Comments | asset management, Data Governance, Data management, Data Quality, distribution | Tagged: asset management, chief data officer, data governance, data tzar, fund, investment product master | Permalink
Posted by Ronan Brennan
January 11, 2013
I am planning a series of blog entries on a blueprint for setting up an effective program of governance for investment product data – this will be of interest to companies who might be considering implementing a solution for investment product data management – or – who might be supplementing an existing EDM data governance program with investment product information – or – who are looking on building out a program for the first time.
While the blog will be primarily focused on investment product data, it will be possible to derive valuable insight for other data types within asset management or in alternative verticals.
The following are the 10 themes I will cover over the coming weeks….
- Organization
- Terms of Reference
- Defining the Strategy
- Model for Stewardship
- Standards and Policies
- Process and Procedures
- Master Data Plan
- Data Dictionary
- Technology Frameworks
- Move to Maturity
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7 Comments | asset management, Data Governance, Data management, Data Quality, distribution, product master, Regulation | Tagged: asset management, data governance, Data Quality, fund, governance, investment product master | Permalink
Posted by Ronan Brennan
August 31, 2012
As published recently in TabbFORUM
Understandably, regulators are now focussed very firmly on managing market stability and ensuring the industry is treating investors fairly.
From the “Know your product and know your client” perspective, asset managers and more specifically their distribution wings have to be seen to market and sell product that is specifically appropriate to each client and their specific circumstances.
The regulator (and I refer to them in general terms here) – is looking for accuracy, completeness, and timeliness – and – they are looking for appropriate and consistent use of data in all public communications with investors – be that – fact-sheets, web, RFP responses or institutional client reports.
Sales and marketing material for investment products is coming under increased scrutiny – the regulators are now treating such material as disclosure of material fact.
Additionally, certain specific clients or client segments – cannot be seen to be treated “more fairly” than others – particularly where there is a conflict of interest between retail and institutional clients in the same investment pool – and – the timeliness of disclosure to all invested parties.
From a management of market risk perspective, the regulators are starting to demand additional reporting and data – specific items of interest relate to; leverage – liquidity – exposure to derivatives – and – concentration of risk – with strong initial focus on counter-party and, region or sector specific exposure, hence the focus on the Legal Entity Identifier and identification of the ultimate parent.
So what are the DO’s and DON’T's of data management?
DO
- ensure you have a governance program in place that covers publication of client-facing product data
- deploy systematic repeatable processes
- consider building audit trails into each process
- empower your data stewards with the tools they need to do their job well
- build a hierarchy of stewardship from upstream to downstream i.e. throughout the publication cycle process
DON’T
- rely on excel and macros
- use manual processes
- expose your firm to key-man risk
- employ the just-in-time operating model where data is amended by client reporting and marketing teams just prior to publication
- underestimate the impact of publishing inconsistent, untimely, inaccurate or just plain bad data!
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Leave a Comment » | Data Governance, Data management, Data Quality, distribution, Regulation | Tagged: accuracy, asset management, data management, Data Quality, FINRA, oversight, Regulation, regulator | Permalink
Posted by Ronan Brennan
August 23, 2012
This year we have witnessed the flood of Key Investor Information Documents for UCITS in the marketplace, yet the bigwigs in the EU are already now proposing to broaden the initiative, and are proposing the production of a new KID (Key Investor Document) for all Packaged Retail Investment Products – or – PRIPS for short.
Since the definition of a PRIP encompasses UCITS funds, this new requirement will also apply to UCITS – although Brussels indicates a five year derogation will apply to UCITS to allow them get over the old KIID experience! The ultimate aim is, however, for all investment products to be accompanied by new KIDs in an attempt to make all investment products as comparable as possible.
The new KID will differ from the old KIID on a number of points, and really these differences will exist only to encompass the various investment product flavours that fall under the PRIPS umbrella, hence the old KIID was deemed to be not fit for purpose.
The new KID documents will be expected to contain answers to a set of “standard” questions. The Commission says these include:
- What is the investment?
- Can I lose money?
- What are the risks and what might I get back?
- What are the costs?
The new KID, like the old document, will contain a risk indicator directly comparable with the synthetic risk and reward indicator for UCITS.
The new documents will also include information on the real costs of the various products – so that they can be compared in a neutral and objective way.
So the new documents will be broadly similar to existing KIID documents, but there will be specific changes to account for the fact that UCITS have properties that other investments do not have, and likewise there are other investment vehicles that have features and design elements not found in UCITS, such as insurance benefits or fixed investment terms.
Firms which have already gone through the mill with KIIDs for UCITS, and have invested in their data management and document production infrastructure will be better positioned to deal with rolling out the new KIDs across all of their investment products, but those who have not…. well they are in for a rude awakening – as 2012 has been a really tough year for many on the KIID front! So we can expect the data management impact of the new KID for PRIPS to be quite severe indeed.
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1 Comment | Data management, Data Quality, distribution, KIID, Regulation, Technology, UCITS | Tagged: investment funds, KID, KIID, PRIP, PRIPS, SRRI, UCITS | Permalink
Posted by Ronan Brennan
July 18, 2012
I am hosting a webcast on “The Impact of Upcoming Regulation on Data Management” on Wednesday 25th July 2012, 3pm BST, 10am EST.
Regulation is a key challenge in the industry and in an unprecedented age of openness and transparency continues to be the no. 1 driver for asset managers investing in data and reporting initiatives. Companies want to mitigate the risk of inaccurate information being in the public domain and many are embarking on data management projects – which will save time, reduce errors and automate processes. The key themes we see center on capability to deliver a systematic, repeatable and auditable data publication process for client-facing data.
This webcast will be presented by myself, and will focus on how upcoming regulations will impact the industry and how asset managers need to prepare to ensure they stay ahead in a highly competitive market. Specific topics to be covered include: the latest version of AIFMD, the final throes of the Retail Distribution Review, the latest on KIID for PRIPS, UCITS V, how being important or “SIFI” is no longer so desirable, Volcker, FATCA and last but certainly not least Pillar III of Solvency II.
Finally, I will touch on what is around the corner and run through some recommendations with respect to preparing for the swathe of upcoming regulatory change.
To register for this webcast please click here.
I look forward to welcoming you online on July 25th.
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Leave a Comment » | Data Governance, Data management, Data Quality, distribution, Dodd Frank, Event, FATCA, FINRA, KIID, product master, RDR, Regulation, UCITS, Volcker Rule | Tagged: accuracy, AIFM, AIFMD, asset management, asset manager, automation, back-office, consistency, control, data governance, data management, Data Quality, FATCA, investment product master, Key Information Document, KID, KIID, MiFID, oversight, RDR, Regulation, regulator, Solvency II, transparency, UCITS IV, UCITS V, Volcker Rule | Permalink
Posted by Ronan Brennan
May 25, 2012
This is the first blog published by guest contributor, Jason Cooke – VP Product at MoneyMate
In a previous blog Making the most of your data, Ronan wrote about how he was finding that the stakeholders in data management projects have changed from technology to predominantly the business.
When I attended the IEA’s 13th Annual Conference on The Future of Fund Management recently this viewpoint was shared, with many of the speakers talking about how the industry needed to focus on the end customer and work with the current and pending regulations to re-establish trust with those customers, especially after the fallout of 2008 which saw the reputation of the industry being badly damaged. This focus on the business of servicing the end customer led to some interesting thinking around how funds need to be presented.
Rupert Todd (President – Investment Services: T. Rowe Price International Ltd) spoke about the proliferation of investment products that has sprung up in Europe and Asia and how this added to the air of complexity about funds to the end investor. One of the key messages from this opening address was that funds were ‘not simple enough yet’.
Throughout the day this continued to be a key theme where various speakers spoke about the iPad generation which expected all the complexity to be delivered in a simple and easy to understand package.
But bringing in simplicity is only part of the story – another key element was building trust through transparency. Making things simple does help bring transparency, but can it bring about trust?
Yes there is a need for fund managers to know their customers and be able to engage with them in such a way that they are seen as trustworthy. A strong element of this is focussing on the end user and ensuring that the data being given to the end user is of sufficient quality and accuracy to help the fund manager connect with the end user.
So where do regulations come into play? Does the fund management industry see these as a burden or an opportunity? Karen Hamilton of Northern Trust gave a clear picture of how the industry should see this as an opportunity to reassess tactical approaches and put in place good governance practices to ensure asset safety, transparency and ultimately investor protection.
When trying to look at how this focus on simplicity, trust and opportunity was going to affect the future of fund management, parallels were drawn on how the airline industry changed with the introduction of low cost carriers that not only made air travel cheaper but also reduced the complexity of buying a ticket and gave greater transparency on how charges are broken down. This has changed the perception of how people view air travel and now air travel is easy to understand and is accessible to all…and perhaps more importantly, it helped break the perception the large established carriers had of air travel and they have had to change to survive. The point was well made and understood on what the funds industry needs to do.
To return to Ronan’s earlier view that the stakeholders are changing to the business, he also highlighted that access to and usage of high quality data was necessary to improve client service and customer experience. Given that a direct movement to promote simplicity, transparency and a regaining of trust was being suggested as compulsory to the future of fund management by the speakers at the IEA conference, it’s clear to me that there also needs to be a renewed focus on addressing data quality to help simplify information, regain investor confidence, restore transparency and ultimately underpin the success of the fund management industry.
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Leave a Comment » | Data management, Data Quality, distribution, Event | Tagged: asset management, Data Quality, fund | Permalink
Posted by Jason
April 10, 2012
We all talk about how important data quality has become, how important it is to deliver transparent, high quality information to our customers, and how that’s been driven by regulation and by changing investors. However, I’ve been at a number of events recently, and talking to customers and prospects about data management and I think that the stakeholders in data management projects have changed – it used to be technology, now it’s predominantly the business.
The drivers for these initiatives have moved beyond improving operational efficiencies – now it’s about improving your client service and your customer experience by sending out high quality data, and it’s about how you use that data to promote your messages as well.
It used to be all about getting the data in one place and it was all manual processes – in many organizations the processes are now automated, they can get the data faster and they have time to analyze it and use it for marketing. Wouldn’t it be great to link your sales data to your fund data so when you have news about one of your funds, you can push it out to the sales force so they have immediate access to that information for their customers … or you can push it out to your marketing department so they can immediately execute a targeted campaign to a particular group of prospects. You could really add value to your organization’s sales processes by leveraging the information in your product data…and connecting it to your advisor and customer data …and then tying it all back together with your books and records data flowing from TA.
Many asset managers have empowered their sales teams with iPads so that they have access to all the latest product information … anywhere, anytime. At NICSA’s recent conference in Miami, it was revealed that 76% of advisers share content online (up from 67% in 2010). This includes performance information, white papers, commentaries etc…. it underlines the importance of being able to provide that information, ensuring that it is always accurate.
There is no point having all these silos of business intelligence in the distribution front-office if you cannot leverage it – make the most of your data!
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1 Comment | client reporting, Data Quality, distribution | Tagged: accuracy, asset management, client reporting, consistency, Data Quality, fact sheet, transparency | Permalink
Posted by Ronan Brennan
April 3, 2012
I love using analogies and metaphors… I used to talk a lot about C level’s perception of data management…and equating it to a duck paddling across a pond… what C level doesn’t see is the duck’s legs paddling furiously to get from one side to another… C level doesn’t see the immense and often chaotic manual processes and time spent on getting fact sheets, client reports and sales decks out to market.
Everyone is talking about data … and everyone has a different perspective. Who really cares about data? Well, today it is a hot topic in the front-office, specifically with the distribution team.
It’s really important for the sales and distribution teams to have timely, accurate, consistent data appearing in fact sheets, RFPs, presentations, client reports, sales decks and on their websites.
Ultimately, data is the oil in the sales and distribution engine … good data helps them to sell their products… and enables the process of communication with clients and prospective investors to run smoothly.
Good data will help them deliver excellent client service, retain their customers and gain new clients… and of course, good data will ensure that the company reputation is upheld.
Even more important is ‘agile data’ -> the pipeline feeding distribution with product data and market intelligence has to be adaptable and scalable and capable of reacting to new product launches, changes in distribution channels and market regulations. The demand for more strategies is leading to more products being added to the arsenal, and the demand for greater transparency in reporting is leading to more data points per product -> this 2 dimensional demand on breadth and depth of information means the data quality management processes, compliance and governance functions all have to be agile enough to meet the demands of distribution.
But, on the other hand, bad data will muddy the waters… pour dirty data into your sales engine will over time lead to it seizing up completely! The consequences of getting it wrong are that you’ll have inaccurate, inconsistent data in the public domain … you’ll be at risk of getting in trouble with the regulator, potentially being exposed to fines and worse still, bad press – your reputation will suffer and you’ll likely lose business as a result. That really doesn’t help the sales engine run smoothly at all … outflows, loss of business, poor client service…. that could all make the sales engine seize up.
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5 Comments | client reporting, Data management, Data Quality, distribution | Tagged: asset management, client reporting, client service, data management, Data Quality, distribution | Permalink
Posted by Ronan Brennan
