Data governance is not data management

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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Posted by Ronan Brennan

Webcast available for on-demand playback…

August 10, 2012

For those of you who missed the recent webcast on regulation and its impact on data management strategies in the investment fund world, it is available for playback here…

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Posted by Ronan Brennan

Webcast: The impact of upcoming regulation on data management

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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Posted by Ronan Brennan

Simplicity, Trust, Opportunity, Low Cost Air Travel and Data Quality – what’s this got to do with the future of fund management?

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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Posted by Jason

Recent Panel Discussion at TSAM USA

July 29, 2011

July has been a busy month with client engagements and travel but I wanted to add a blog about the event I attended in New York in mid July.

Many people will be familiar with TSAM, the annual buy-side technology and operations event, which is usually attended by senior operations, marketing and IT executives. I always enjoy these industry events as they offer a great opportunity to network and catch up with people in the industry as well as finding out about the latest trends and developments.

I had the pleasure of participating in a panel discussion on “Critical issues in data management” together with industry veterans: Regina Trach, VP Marketing Services at J.P. Morgan Asset Management, Gerard Walsh, Head of Delivery, Global Strategic Solutions at Schroder Investment Management, and David Bates, Principal at Citisoft. The discussion was moderated by Uday Singh, CEO of Osney Media. It was only supposed to go on for 30 minutes but ended up stretching into an hour as there were so many questions and such a lot to talk about.

Initially, we focused on what the key issues were in the data management area, with most of the panel agreeing that drivers for data management projects centred around managing risk, complying with regulation and also managing the data “overload” – what to push out, when, and to whom. Gerard from Schroders said that as clients became ever more demanding, they needed to get timely and accurate data as fast as possible in whatever way they wanted it whether in person, in a report, on a web page or as an app on an iPad. J.P. Morgan recently launched an iPad app for advisers and feedback has been phenomenal. But, getting information to devices is a major data and integration challenge.

In terms of regulation, one of the concerns is that asset managers know there will be demands for transparency but don’t know what they will be. They are wary of the SEC and FINRA and what they will actually be looking for. The SEC is likely to take information and fact sheets from an organization’s website and compare it – and will want to ensure it’s all accurate. They will also want to know historical information e.g.”can you show me what your website looked like on April 11th, 2009″? Asset managers still have a business to run and the wall of regulation can be a challenge – but they must be compliant.

We then went on to talk about the amount of data that is available and how accessible it needs to be… With large global asset managers averaging 4.5 million items of data each month, it’s hard to answer the question “Do you know how good the quality of your data is?”  You really need to work out what to push out to your various audiences… this is where using segmentation/ audience management is very powerful. If you have a contact strategy where you test email open and click thru rates, track website visitors and monitor Twitter, you will know who is listening to you and find out what they want to hear. 

We then went on to talk about what is the right material to push out? Should we be reviewing what we need to report on. What do customers need?  We also need to focus on the consistency of information across the organisation e.g. surveys, web presentations. Separate areas of the business are generating data and enabling it to get out. I talked here about how marketing ops have not been well served by IT and there are lots of manual processes involved in getting data to market. If data points are managed on spreadsheets, you have to have proof readers coming in to get material out to market and you have a much higher risk of error. Setting up a data governance process and ensuring that data is corrected at source will help greatly and you won’t end up with marketing teams chasing, checking and keying data at the last minute.  Also, if you automate the process, you will significantly reduce your fact sheet production time.

Then we talked about actually getting data management projects off the ground. It can be quite difficult as often times C level doesn’t realise there is anything wrong with the data. It might be easier to focus on a smaller project first and try building it out from there. For example, for Schroders, the web was a big driver and they wanted to provide their sales force with tools that can help people make investment decisions – having timely, accurate and consistent data available on the web was a key influencer.

The other key influencer will be cloud computing– not just on the entire IT area but on other areas within the organisation e.g. Salesforce.com.  Asset managers are more likely to outsource if it’s not a strategic advantage to do it themselves.

 

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Posted by Ronan Brennan

Recent Panel discussion at TSAM UK

April 26, 2011

Apologies that I haven’t been blogging for a while… I’ve been travelling a lot and working on some exciting new customer projects (which of course I can’t talk about yet!) but there are a few things I’ve been wanting to post.

About a month ago, I attended Osney Media’s TSAM UK conference in London (March 8th). TSAM has been running for a number of years in the UK and is generally seen as the leading buy-side technology conference. Where possible I enjoy sitting in on panel discussions and this time I participated in one called “Critical Issues for Data Management” – the title is vague enough that the discussion can really go anywhere depending on questions from the audience or an individual panel member’s hobby horse, but I think this one did address many of the key issues that the industry is facing today.

Besides myself, the illustrious panel included: Markus Kohn, Head, Data Management EMEA, UBS Global Asset Management; Jonathan Hammond, Business Technology Practice Leader, Knadel; John Mason, COO, Netik and Jean Williams, VP of Software Solutions, Asset Control.

The session started off with a discussion of the impact of poor data and the answers ranged from a discussion on why data is poor in the first place – e.g. mergers and acquisitions create data problems or data being the poor relation to cost to lack of understanding of data.

Ultimately, most people were in agreement about the impact of poor data – there will be errors and cost implications. The front and middle office depend on getting accurate information to the end client and there could be friction or lack of trust across departments if data is not managed in an efficient manner. Inaccurate data poses a regulatory and reputational risk and any damage to the brand resulting from inaccurate data could be very difficult to repair.  Costs will be driven up – either the cost of fines as a result of publishing incorrect data or the cost of reprints if the data errors are discovered after a report/ factsheet goes to print. Data quality management has a much higher profile across the enterprise nowadays as firms are realising just how important it is.

The discussion then went on to talking about getting buy-in from a senior level to implement a data management programme. Personally, I think it is really important to get buy-in at an early stage – sometimes C level is not aware there is a data problem in the organisation. I think there was general agreement amongst the panellists that a quantifiable business case needs to be put together to convince C level that a data management project is worth the investment. It really is around growing revenue or reducing costs, although increasingly the argument around compliance and regulation is gaining traction. Many large organisations have had to deal with failed IT projects and there is often reluctance to implement large scale IT programs that may be seen to be time-consuming and costly.

The moderator then went on to talking about keeping data management strategic and the best way of doing that – again, people agreed that governance and vision is important but I think that strategy and tactics go hand in hand and that governance and stewardship are very tightly linked. Stakeholders need to see quick wins and want to know the goals of the projects.

Then we talked about different operating models and what might be the best one. Ideally, daily tasks should be off-shored and if you do outsource your data management, you should really be looking at partnership with your provider (or what I often call “with-sourcing). People want to keep control so it is important that the relationship with the vendor does not make them lose that control. We then talked about the ownership process around moving to a different operating model and everyone felt that full transparency was needed as well as governance rules being in place to ensure everyone knows what to expect. Data stewardship needs to be at different level within the organisation but ownership needs to be very clear.

Our final area of discussion was how to solve the meta-data problem. I always talk about the importance of establishing a data dictionary upfront and making sure that everyone is talking about the same language.

 I hope you find this quick summary of the panel discussion interesting, overall it was a great conference and I’m looking forward to participating in the next TSAM event in New York in July.

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Posted by Ronan Brennan

Client Reporting – Data Management: The Critical Issues

November 29, 2010

I recently  participated on a panel discussion at the Osney Media’s Client Reporting Conference in London that was chaired by Peter Bambrough a management consultant at Citisoft.  The topic for the panel was “Data Management: The Critical Issues”,  and on the panel I was joined by:

  • Philip Keeler, Head of Operations IT, Hermes Fund Investors Ltd
  • Bob Simon, Senior Director of Business Development, CorrectNet

The first question that was presented to the panel was “Why do data management projects go wrong?”

My own view point here is that projects I have seen fail were nearly all down to a lack of clear data governance, stewardship and generally poor communication.  In order for a data management project to work there has to be a common understanding of the issues at play. Communication is key here, especially between the middle and back office –  all teams have to be speaking the same language.  Another issue that the data management projects face is the lack of understanding from senior management. As Philip Keeler of Hermes said, “there needs to be a holistic view within the company, senior managers need to be aware of the issues and the implementation processes involved”.

Also when implementing a data management project is it important to break down the project into manageable chunks, make realistic deadlines and achievable goals, this in turn will reduce the risk and make the project less likely to fail.

Some of the interesting points that came out of the discussion with respect to running successful data management projects were:

  • Silo approach is only helpful if you have complete view of the landscape
  • Warehouse approach to everything is always going to lead to failure as they take too long to implement and the landscape invariably changes before the project finishes
  • Better model may to  have data warehouses feeding data hubs, from which business unit ‘fit-for-purpose’ data marts are published
  • Communication both top-down and bottom-up is critical
  • Senior management buy-in to project is essential
  • Multi-tiered stewardship
  • Governance and stewardship operating hand-in-hand
  • Clear understanding of current cost exposure versus the new target state

Another question put to the panel was in relation to getting the right people to work with the data – who are the right people?  We know that it is not a job for marketing departments or indeed asset managers. Organizations need to avoid the “Just in Time” data management operating model where a team of client reporting or marketing execs scrub and cleanse the data just prior to publication.  This is a critical job and the right people need to be there to ensure that it is being carried out correctly.   So who are the right people for the role? It was agreed unanimously that you need to adopt a multi-tiered approach to stewardship – you need stewards operating at the data source level – data analysts – that are comfortable dealing with the low level source oriented quality issues, you need product specialists that are comfortable looking at the data from a product/strategy perspective and you need business analysts working in the front-line teams (client reporting / sales / marketing) that are comfortable looking at the data from a reporting / presentation perspective.

The general consensus among the panel was that communication, understanding the data issues and ensuring the correct people are managing the data are all important elements in the fight against combating data management issues.

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Posted by Ronan Brennan

TSAM North America – September 14th

September 7, 2010

Event season is upon us once again, I will be speaking at this year’s TSAM North America.  I am delighted to be joined on the panel by Regina Trach from J.P. Morgan Asset Management, Michael Leinweber from Schroder Investment Management and Rob Flatley from Netik.  Together we will be discussing “Bringing automation into the investment product data management space in order to ensure that timely and accurate data is always available.”

If you have not yet signed up for it, there is still a chance to register.  Hope to see you there.

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Posted by Ronan Brennan

The Devil is in the Data

June 30, 2010

As you’ll have seen in a number of recent posts, I’ve been talking a lot about the regulator and how increased regulatory scrutiny will impact asset managers in many areas, not least in data management.

Regulators are focusing on protecting investors and ensuring financial services providers are treating clients fairly.

Sales and marketing material is often a key element in the investment decision process., so data that is being communicated to the market by asset managers MUST be 100% accurate and consistent and in no way misleading.

I recently wrote an article on the topic which featured in a recent online edition of Securities Industry News and I am often asked questions by our customers and prospects about our views on upcoming regulatory trends and how they will impact the area of asset management. It’s also a subject we’re seeing more of in the news and on conference agendas.

As there seems to be so much interest, we decided to run a webcast on this topic on Wednesday 14th July (at 11:00 EST/ 16:00 BST / 17:00 CET). While I don’t claim to be an expert on the subject (far from it!), I have been following the goings on at the SEC. Finra and the BoE/FSA and I definitely think that some of the new regulations coming down the line will have significant impact on the industry. What I want to focus on in the webcast is how data management processes should be amended to ensure that you do not attract unwelcome attention from the regulator.

Areas I will touch on are as follows:

  • Financial regulation reform is imminent – are you ready?
  • How regulation will impact data management
  • What does this mean for asset managers?
  • How to ensure that your data management processes will measure up to regulatory scrutiny
  • Tips on data governance

To attend the webcast, just click here to register.

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Posted by Ronan Brennan

Data Damnation – how do I get message across that there is a problem?

May 4, 2010

I spoke to a really frustrated “Client Reporting Data Manager” at the FSO “Investment Management Industry Transformation and Outsourcing Strategies Forum” in London on April 20th last.

Their issue was that their institutional client reporting team spent more time fixing up masses of data prior to publication than they do actually on reporting to clients.

I have referred to this concept on many occasions as “just-in-time” data management – the just-in-time data management operating model can be a disaster and I would not recommend it as a modus operandi.

So how do you go about getting out of the state of “data damnation”?

First of all you need to drop the operations hat and don the sales hat – because you clearly have an issue and you are going to have get buy-in from top-down and bottom-up that the issue should be addressed.

Next question – how do I go about getting buy-in that there is a problem that needs to be solved? Well before you start talking about your problem you need to build a business case – don’t waste valuable C-level time bringing a problem to the table without bringing the solution. Remember at C-level many of the actors are not aware there is an issue – using the duck pond analogy – what they see is a duck swimming across the pond gracefully i.e. they believe that the company’s client-facing data is of good quality and is timely, accurate and consistent – what they do not realize or see is that beneath the surface the duck’s legs are paddling furiously i.e. the process of producing high quality data is enormously manual, non-systematic, high-risk and resource intensive.

So…

1. Build a solid business case that highlights the upsides that will be delivered by moving away from the ‘just-in-time’ model to a model that is structured around governance, de-centralized ownership, accountability, oversight and transparency. Examples of upside sells are:

  • Better client facing data will mean you have happier, “stickier” clients. Your sales/distribution network will place greater trust in your data and you will ensure that there are no outflows, loss of mandates etc due to poor quality data being received by your clients. Identify clients / mandates you have lost due to poor service or bad quality data – identify the exact financial costs to your company.
  • Identify the potential upside in new mandates and inflows as a result of brand recognition in the market for having excellent high quality data
  • Identify how your own team’s ‘output’ will improve – get specific on the activities you will be able to devote more time to as a result of not having to chase your tail, fixing data at the last minute.

2. Outline the risks that will be mitigated by moving to the new target model – you need to don the insurance sales person’s hat here. You should talk about the following:

  • Identify the cost of the accident which is waiting to happen
  • Identify the probability of the accident happening if no action is taken
  • Put an actual value on the following: the damage to your brand and reputation – what cost would be involved from a marketing perspective to dampen negative PR as a result of the accident happening? Some would argue your brand and reputation are priceless – that is because the PR cost to put it right runs into millions and tens of millions od dollars in many cases. What impact would it have on your AUM base – note the 400m USD outflows from AXA Rosenberg recently due to negative news – this was reported on FUNDfire on April 29th 2010 – “AXA Rosenberg has been fired from a $400 million enhanced large-cap equity mandate by theFlorida State Board of Administration...“
  • Put a value on the cost of a fine from the regulator – remember the fines are now commonly a 7  figure value
  • What impact would a regulator fine have on your brand?

3. Outline the costs that will be saved and include:

  • How many FTEs will be reduced / re-allocated as a result of your new operating model?
  • How will your vendor relationships change? – outline how it will be simpler to move particular vendors once you have a clean data interface – typically vendors who supply services such as client reporting, automated fact sheets, micro-sites and compliance have deeply-embedded, difficult to shift relationships – they know this and charge a premium as a result.

If you do not have a strong data governance organization permeating your company, set about introducing one – this really does require strong “C-level” leadership and drive – many companies adopt the ‘Chief Data Officer’ role, or Data Tzar, while others employ a broader steering committee approach where senior data stewards oversee the data governance at a company level. Each approach has its own merits and typically the organization’s culture will determine the best fit.

Identify data stewards who will take ownership of data at the ‘origination’ of that data i.e. at the earliest point in your structure – i.e. where the data enters your structure or is created within your structure. This is the aspect of the ‘sales process’ that is bottom-up. This will be a thankless, fruitless task if you have not executed the top-down sales process.

I will follow up soon with a post that deals with what the target operating model for client-facing data should look like…

As an aside, at the same FSO event, I was the moderator on the “Thought Leadership: Best Practices for Data Management, Performance Measurement and Client Reporting” panel.

The background theme to the panel discussion centered on the rapid technological advancements and evolving operational initiatives that have brought into focus the importance of centralized data management. These changes also highlight the need to translate mundane data into meaningful strategies and analysis to enhance client reporting. The panelists’ goal was to debate the pressures of effective data management and the role of shared industry data utilities in the financial services sector. The discussion was also to focus on the latest technological advancements that support valuable data management, improved client reporting and servicing and a sound performance measurement framework.

The specific topics discussed were:

  1. Drivers for re-architecting data management post the financial crisis Read the rest of this entry »

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Posted by Ronan Brennan

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