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.

Leave a Comment » | Data Governance, Data management, Data Quality, distribution, Dodd Frank, Event, FATCA, FINRA, KIID, product master, RDR, Regulation, UCITS, Volcker Rule | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , | Permalink
Posted by Ronan Brennan

Thoughts on Data Governance

June 21, 2012

Last month I participated at a panel discussion at Osney Media’s Data Management North America conference in New York. I always enjoy these panel discussions, as they present an opportunity to meet industry peers and also to find out what people in the industry are concerned about. My fellow panelists at the event included:

Lee Kenyon, Vice President, Data Governance, Eaton Vance Management Inc.
Nick Eisenlau, Senior Consultant, Cutter Associates
David Bates, Principal, Citisoft
Danielle Newland, Data Management Product Manager, Eagle Investment Systems

and the discussion was moderated by John Bottega, Chief Data Officer, Bank of America

After the initial introductions, John went round the table asking what data governance meant to different people. Overall, there was a consensus that the definition of governance was establishing a framework for decision-making process and authority in order to implement data strategy. It should be treated as a project not a program and so it needs constant adaptation. Anyone who treats it as a project will fail…

John went on to ask opinions about how data management had changed from being technology driven to being more business driven. The main reason for this is around business risk – if C level start getting different information from different sources, they may begin to wonder if they know what’s really going on in the organisation. Historically, IT drove data management initiatives. There was a huge spend in the past but did the business benefit  at all? Technology is important but you also have to demonstrate the business value and technology should support rather than drive the business.

So now that we had defined data governance and the drivers, we started talking about how you create a sustainable data governance program?

The best approach is to not try to do everything at once..  pick a project and start with that. But you need to get people bought in. You need involvement across the business, and you can do this by making it about them achieving their business goals and linking it to risk, rewards and returns. We then began to talk about the carrot and the stick approach… the problem is that we know the sticks are out there but we don’t know how big they are or how close they are. For example, people are gearing up for regulation but as many of the regulations haven’t been implemented yet, they are not sure what the impact will be.

And of course, you need to think about who should be responsible for running data governance. Should it be business, technology or operations? Most of the panel agreed that it should be the business .. they are responsible for revenue growth and also for managing risk.  But many organisations still don’t have formal data governance in place – the panel agreed that if regulatory controls are enforced you will see a bigger trend towards data governance. I agree with that and am somewhat cynical that people are taking governance seriously. Not enough people are walking the walk but lots of people are talking about it. Solvency II in Europe is really driving data governance though and will definitely set trends for the future.

Leave a Comment » | Data Governance, Data management, Regulation | Tagged: , , , , | Permalink
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.

Leave a Comment » | Data management, Data Quality, distribution, Event | Tagged: , , | Permalink
Posted by Jason

Making the most of your data

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!

1 Comment | client reporting, Data Quality, distribution | Tagged: , , , , , , | Permalink
Posted by Ronan Brennan

Data is the oil in the sales engine

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.

4 Comments | client reporting, Data management, Data Quality, distribution | Tagged: , , , , , | Permalink
Posted by Ronan Brennan

Thoughts from TSAM (Part 2)

March 26, 2012

Following my most recent blog on the panel discussion held at TSAM in London recently, I thought I would add some further notes on the discussion. We had talked about buzzwords used and then about data governance… The theme of the discussion then switched to the risks you’re exposed to from miscommunication of information or data – the commentary is really as you would expect:

• Fines from regulators

• …which can lead to brand damage

• …which can lead to loss of clients and mandates

• …which does lead to outflows

• …which does directly impact your bottom line

Of course, the point was made that you do not need be fined by the regulator to incur the spectre of spectacular outflows – poor data quality in client communications is enough to trigger this alone.

I related a specific story I had been told by a director of institutional sales at a prospect I met in not too distant past, who earlier that month had got through the RFP process for a serious eleven figure mandate, which would generate many tens of millions in fees. So having got through the RFP process, this manager clearly had the right risk/performance figures to meet the minimum hurdle for inclusion in the beauty parade process. The deal was lost though on one critical point – the data presented at the beauty parade on the sales deck was completely at odds with the strategy performance as listed in the RFP response, and yes, they did not win the mandate. If you are handing someone billions and billions to manage you need to build a relationship based on trust and transparency and having inconsistent/inaccurate data leads to total breakdown in trust.

The topic switched again at this point to how can we get IT and business working together more effectively on data management projects. This topic generated lots of interesting viewpoints, which I have summarized here in bullet form:

• Business often gets involved too late – something specific to IT led projects

• There is general consensus that business-led projects are more successful mainly as the requirements are understood earlier in the process

• The project analysts and the project manager need to have strong business domain expertise with a really good understanding of technology to bridge the gaps between two teams

• It is not easy to find analysts with good understanding of IT and business – panelists agreed that the more successful people are those who start in IT and move over to business side.

At this point the discussion started to wrap up after a few questions from the audience and each panelist gave their final thoughts on overcoming the challenges. My own thoughts were that the driver of data management projects is changing, it is no longer fear of fines, it is sales and distribution demanding timely and accurate data. Another viewpoint was that we have to do a better job to remove artificial differences between IT knowledge and business knowledge, greater effort is required to try and get people to understand each other’s point of view. As data management projects are getting more complex, clear objectives and accountability are key success factors, we have to get the right stakeholders involved and use the right language. Finally, one of the panelists said we should not see data governance as a cost!

It was a great session, and I really enjoyed sharing views with the other participants on the panel. I look forward to the next one in New York on May 16th.

Leave a Comment » | Data Governance, Data management, Data Quality, RFP | Tagged: , , , , , , , | Permalink
Posted by Ronan Brennan

What risks are at play when you use a third party data provider to populate your data on your own website?

March 9, 2012

In this age of renewed focus on cost savings, I have noticed quite a few firms are increasingly using third party data provider data for their own products on their own websites as a way of reducing their internal data management costs. At face value, it seems like a reasonable way to drive down cost for what can be a very serious cost driver in any asset management firm.

However, you can think about it in another way. What message does this give to the market, to the potential investor? Does it say that you are incapable of managing your own data, or even that a third-party data provider has a better grip on your data that you do? What does this say about your firm?

If the data provider errs and promotes inaccurate information about your product on your website, sure they may take a hit – maybe a month’s fee in SLA credits, but who takes the true financial burden, who takes the reputational hit, who deals with the regulators who arrive on site for a multi-week due diligence audit?

Also – people may make investment decisions based on incorrect or out of date information – customers could choose to withdraw their investment, and new prospects may decide to invest elsewhere. If it turns out, that your funds were mis-represented in public, you will suffer damage to your reputation and to your brand and you might even have to take corrective action if any investor loses money due to errors in the information that was provided.

It all comes back to caveat emptor – buyer beware – you get what you pay for.

Leave a Comment » | Data Governance, Data management, Outsource, service provider | Tagged: , , , , , | Permalink
Posted by Ronan Brennan

Where are you on the Data Governance evolution scale?

February 27, 2012
This post was recently published on TABBFORUM (21st February)

Just about every asset management firm now claims to have a formal data governance process in place – in fact if firms aren’t saying this we should be worried indeed. So while all data quality management governance processes may be created as equals, they are very rarely at the same point of evolution – with the bottom of the evolution scale being a million miles from the top-end fully evolved processes.

In the diagram below you can see that processes in the early stages of evolution start as chaotic processes, with often low levels of standards and formal operating procedures, with very little sign of an obvious ‘master plan’  or strategy.

Data Governance Evolution - from Chaotic to Predictive

The Data Governance Evolution Scale

In order to move to the next stage on the evolution scale, you need to establish standards, you need formal operating procedures for data stewards such that a semblance of an operating data quality management process starts to take effect with a strategy and master plan identified and communicated to the applicable stakeholders.

The mid-point in the evolution scale is achieved when the process can be accurately described as defined – that is where you have identified key performance indicators that show the health of your process, where you have documented artefacts such as a data dictionary and rules dictionary, where you can show you have stewardship operating across the breadth of the data creation to data consumption processes, with applicable technology frameworks in place to support stewardship of the governance with key processes like root cause analysis being tracked and measured.

Very few firms have moved past the ‘defined’ stage in the evolution process. Getting to the next stage ‘Pro-active’ requires serious attention and investment and very often monumental cultural re-alignment. Pro-active governance is achieved when you can demonstrate a cast iron continuous improvement cycle, with error feedback loops constantly leading to process improvement – very much in the model of six sigma – in fact many firms who have attained this level, do so under the auspices of an investment in ISO9000 or Six Sigma. At this point of evolution, the firm is applying automation across the board to root out the manual human errors that plague many firms today. Key to the approach is a unified governance approach to how data is managed across all of the data silos in the firm.

Finally, you have reached the nirvana point of evolution when your data quality governance has become what many refer to as ‘Pre-dictive’. At this point of evolution, not only is the process fully automated, it also has a fully demonstrable audit trail that fosters accountability and ownership. The top-down strategy is fully in tune with the bottom-up application of the strategy, with complete cultural alignment across the breadth of the firm, effectively with the people, the process and technology all working in harmony. At this point, your process feedback loops are fine tuning, rather than fixing.

2 Comments | Data Governance, Data management, Data Quality | Tagged: , , , , , | Permalink
Posted by Ronan Brennan

Tribal conflict on the investment plains

February 20, 2012

One of the key trends now with the global asset management community is the redistribution of products from one region into another – take for example, the popularity of BRIC and emerging markets funds in the US and Europe. Similarly, in Asia you have very high demand for equity funds from the G7 regions, and investment grade bond funds from those countries lucky enough to retain their AAA ratings. Global firms are increasingly co-locating their investment management teams in the regions where the investment is being placed. The middle office support for these teams is also increasingly being co-located with the same teams.

The problems start when the fund is sold in another region, quite often the local sales/distribution team takes the core investment product data from the local team and applies their own slant to the information – this application of regional slants to data coming from the region of investment can lead to very serious consequences, which can often erupt in tribal conflict between the regional division producing the product and the regional division selling the product.

Simple things like re-classifying terms such as ‘Real Estate’ (US lingua) to ‘Property’ (UK lingua) can seem straightforward, but when you have one region that takes a security classified as ‘Asset Backed Security’  and changes this to ‘Cash or Cash Equivalent’, problems can emerge. This is a simple example of course and one that very few firms will make again, but there is unlimited scope for misunderstanding and resulting misclassification of data when you have one team trying to interpret what another team means.

The only way to solve this is for global firms to have global governance and stewardship for their investment product data. The distributed / decentralized model for governance which exists in many global firms today will only lead to continued conflicts between their regional centres, and in turn expose their firm to specific reputational, regulatory and financial risks.

Leave a Comment » | Data Governance, Data management, Data Quality | Tagged: , , , | Permalink
Posted by Ronan Brennan

Data at your Service

February 2, 2012

Ever wondered how you can improve client services? I would argue that easy access to timely, accurate and ultimately reliable information about your products i.e. their investments, being delivered through an effective data governance programme, is a key enabler to service excellence. Arguably, the main differentiators for investors in terms of client services are the timeliness and quality of Investment Reporting coupled with a responsive and assured service that they can rely on if they wish to enquire about their investments. In the age of transparency, there is no room left for complacency in these areas.

Timely and Reliable Investment Reports

Strong data governance coupled with effective stewardship enables shorter reporting cycles therefore providing your clients with their investment reports earlier and exceeding their expectations for up-to-date information on their investment portfolio. However, timeliness of delivery will not do it alone. It has to go in pair with reliable data. The validation process in a data governance programme ensures that you get it right the first time; which in turn will save time by removing the iterative process of checking, correcting and rechecking reports. Clients do not only expect to receive reporting on time. The content has to be complete, accurate and consistent for it to deliver value.

Finalising reports earlier also provides your client service team with more time to focus on adding value when delivering the information by analysing the data and preparing to review the investment report with or pre-empt questions from their client.

Assured and Responsive Client Service

In the current environment and under increased regulatory scrutiny, asset management firms are adopting a fiduciary mind-set and strive to be as transparent to their clients as possible. Therefore, your customer service team’s ability to navigate your product data and have timely and accurate information at their finger tips is critical to your success. The changing regulatory landscape requires customer service staff to ensure they are prepared to address any question or concern that an investor may raise in a responsive and knowledgeable manner. Therefore, conveying confidence, building trust and making the investor feel that they are in good hands.

A strong data governance system will empower client services to achieve these high standards by building their own confidence in the information that they source internally, by providing them with the most up-to-date data and by allowing them to quickly identify the owner of specific data points to route investor enquiries to the right source of expertise within your organisation.  Therefore, helping them to get the answer right the first time.

1 Comment | client reporting, Data management, Data Quality | Tagged: , , , , , , | Permalink
Posted by Jeff Willems

« Previous Entries
Next Entries »
Follow

Get every new post delivered to your Inbox.

Join 27 other followers