Globalisation is a buzzword that never seems far from the headlines. And having global asset managers operating across multiple jurisdictions certainly has its advantages – including access to a wide variety of international markets and investments.However, having funds in different locations and different time zones can also cause some serious data headaches when it comes to reconciling positions.
For instance, an asset manager based in Asia may wake up to a position that has changed since their own market closed. But if they dont have accurate data on any changes to cash holdings, positions or a major event like a hire or acquisition which happened overnight, they could be making crucial investment decisions based on inaccurate data.
And this goes double for the more complex over the counter (OTC) transactions and fixed income trades, which are more sensitive to small changes in price or any new corporate actions. Fund managers need to be up to date on any changes in markets across the world while they have slept. This can be anything from making sure that all corporate actions are applied on their positions, to taking into account the impact of any sudden political events or simply ensuring that their cash balance is accurate for the next few days.
Unfortunately, many global asset managers currently dont have the systems in place to allow their funds to rely on and trust the data that they have. This can often be due to complex and fragmented IT legacy systems. Rather than have all the data in one easy-to-access repository, it can be spread across several different legacy systems and spreadsheets.
For organisations dealing with numerous complex asset classes and workflows, this approach can often come back to bite them as the business grows and the piecemeal software struggles under the weight of increasing volumes.
At the end of the day, if you want to be able to rely on your data you have to have it all in one place. This is why firms are increasingly turning towards an Investment Book of Records (IBOR) to aggregate data held in multiple platforms across multiple jurisdictions. However, this is no mean feat. Data coming from different sources needs to be digested, integrated and normalised as well as quality controlled and made suitable for applying business workflows and different views of the data. Simply put, an excel spreadsheet wont cut the mustard.
Initially this may seem a daunting task, but having the right systems in place will be crucial for global asset managers looking to separate themselves from the competition. Having a flexible and scalable data management system in place means that when the time comes to grow, the software will be a solid backbone to support any increase in thenumber of transactions.
Yan de Kerland is Head of EMEA Sales at NeoXam
