If you’re an asset manager, having a golden source — a complete, accurate, trustworthy repository of your organisation’s data which you can access quickly and easily — is a game-changer. 

McKinsey reckons investing in technology that organises, analyses, and stores your data in one place can slash asset managers’ admin costs and increase revenue by as much as 30%

The problem is that, once it leaves your golden source, your data can change and become inaccurate. And because third parties aren’t always regulated, it’s your firm that could be on the hook should regulators uncover any issues.  

Clearly, having your data nice and organised internally isn’t enough. Just as important, you have to reconcile this data with what you’ve shared downstream.

But how do you make regular reconciliations part of your process without increasing your costs and piling further pressure onto your staff?

Why data goes wrong

There are three main reasons why data can become inaccurate:

  • Manual processes
  • An overwhelming workload
  • Poor third-party controls 

The role of human error in poor quality data 

While asset managers are increasingly warming up to technology’s benefits — digital transformation was the industry’s top priority in 2020 — information-sharing often still relies on outdated systems. And yes, we mean spreadsheets, word documents, PDFs and other 1990s technologies. 

These systems are inherently prone to human error. For instance, a study found that 88% of spreadsheets contain at least one mistake. And errors are common not just among juniors, but also among those who consider themselves advanced users.

But data can also get changed, coded to different formats, and locked into documents. These errors tend to reveal themselves only during audits, at which point the damage will have already been done. 

Staying on top of things

Manual processes are risky. But who has time to double-check the data every step of the way, when there’s so much else to do?

Whether it’s making investment decisions, meeting reporting obligations, or keeping abreast with regulatory requirements — from run of the mill updates to key changes such as the PRIIPs regulation and SMCR — there’s a constant onslaught of things to stay on top of. Which means there’s often simply no time to make these checks. 

At the same time, having a golden source can lull you into a false sense of security. But the uncomfortable truth is that data isn’t immutable. If the methods used to share it downstream are prone to mistakes, it’s safe to assume that mistakes will happen.

The challenge of third-party controls

If it can be tricky to catch mistakes internally, it’s even harder to exercise proper oversight and control once your product data gets into third parties’ hands. 

In the course of our work, we’ve even seen third party systems that allow users to clear down or overwrite data. This data could then be delivered directly to customers from those third parties’ administrators. Which means verifying their accuracy is all but impossible. 

Who’s got time for reconciliation?

There’s no way around it. With so much that can go wrong, reconciling the data you’ve sent downstream to your internal records is crucial. Left unchecked, mistakes in your product data could mislead customers, harm your reputation, and put you at risk of hefty fines. 

Case in point, in 2019, the Financial Conduct Authority fined Goldman Sachs £34.3 million and UBS £27.6 million due to long-standing reconciliation issues.

The Financial Conduct Authority was clear that these were serious and prolonged failures. That said, it also sounded a warning: 

We expect all firms will take this opportunity to ensure they can fully detail their activity and are regularly checking their systems so any problems are detected and remedied promptly.

But this also begs the question. If even huge organisations with endless resources like Goldman Sachs and UBS can get it wrong, how can you possibly make sure you get reconciliation right?

The simple answer is: if you’re doing it manually, you can’t. 

Going over and comparing every single sentence in every single document with a fine-toothed comb and ticking and tying every single record is incredibly laborious and time-intensive. And it’s also a breeding ground for further mistakes.

Luckily, there’s a faster, more cost-effective, more efficient way to do it.  

Take the effort out of reconciliation, with Fundipedia

At Fundipedia, we’ve developed a platform that can reconcile your data automatically in real time. 

The system is designed to work with any platform or source, whether it’s vendors and distributors like Bloomberg, Revinitiv, Funds Library, and Morningstar, or documentation such as PDFs, Word docs and spreadsheets. 

You can set up reconciliation so it runs on a user-defined schedule and customise it to suit your needs. 

But more importantly, reconciliation is quick and easy by design. You can:

  • Automate as many functions as you want 
  • Get alerted by our First Responder feature as soon as the system finds data that’s out of sync, so you can get on the case and nip the issue in the bud
  • Assign Second Responders who get alerted should the data remain out of sync
  • See all your reconciliation issues in one location so you can instantly spot patterns 

Don’t ‘send it and forget it’

Just because your data is accurate internally, it doesn’t follow that it’ll stay that way. There’s a lot that can go wrong on its journey downstream. 

With Fundipedia, you can integrate reconciliation seamlessly into your workflow, so you can set your mind at rest that your product data is always complete and error-free. 

Learn how Fundipedia can help you make sure your data stays accurate and your firm stays compliant. 

Book a demo today