The big question: how can asset managers meet their data responsibilities
Jonathan Matthews, Head of Middle Office at London and Capital Group explains why data literacy is a top concern for the firm and how fund managers can think about information security
clearpat POSTED ON 11/30/2020 4:02:15 PM
Fund Operator: With respect to Data Management controls, what would you describe as the key responsibilities that asset managers have and how do you ensure data quality?
Jonathan Matthews: In the simplest terms, it comes down to creating and enforcing policies which ensure that the information held in systems is accurate, secure and meets all applicable regulatory standards.
When we look at data, we have different categories of data and different requirements for depending upon the category.
"Data comes in various forms, but the key is the quality of what you are using."
For instance, we have static data that comes in and never changes; ongoing transactional information, which will change every single day and will be updated seven days a week. And we will have security information that will come from Bloomberg or another supplier, which we are using in conjunction with our own data.
Data itself and information comes in various forms, but the key across all of these is the quality of what you are using.
If you are recording information on clients, which is a very specific for each client, ensuring that this is complete and accurate when you fill it in is vital.
In these situations, unless a client has completed the information themselves, we are totally responsible in how we do this and ensuring that it is done properly.
"If you are recording information on clients ensuring that this is complete and accurate is vital."
If you are looking at data quality from transaction information, we are somewhat beholden to the third-party custodians that we use in terms of the information that they supply to us.
We need to ensure that there are checks and reconciliations made on this data so that it is as accurate as can be.
There are some parts of information where you are masters of your own destiny and others where you are somewhat beholden to third party people that you work with.
In terms of specifically what we capture, hold and our client specific information, quality is key.
If you are recording information on clients, which is a very specific for each client, ensuring that this is complete and accurate when you fill it in is vital. We have gone down the data steward routes with a member of each team being chosen and then empowered to look at the data that their teams are recording and feeding back to their appropriate teams.
"If you are recording information on clients, ensuring that this is complete and accurate is vital. "
We have tried uploading forms where people enter data during client meetings, and this automatically feeds into our systems.
The key point is that however you try to capture information, you need to support it with education and training across the company.
The type of people that you might employ in an Asset or Wealth Management company are going to be varied, as they are going to differ in terms of age and backgrounds and yet they will all be responsible in some way for capturing and entering information.
One of our biggest objectives has been to improve this level of data literacy across the company. If we can do this then, in turn, the quality of the data that we are capturing is going to increase.
"One of our biggest objectives has been to improve this level of data literacy across the company."
In terms of how this can be achieved, as well as training staff, you also need to interrogate the information that people are putting in, which means you need to be able to audit the information that is being recorded.
This needs to be accompanied by proper feedback to staff so they know what they are doing well and where they can improve.
Unless you go and investigate what is being entered, you are never going to know who needs more attention and where changes need to be made so ensuring that you have data trails on these points is vital.
"As well as training staff, you also need to interrogate the information that people are putting in"
Information security is another key element. Different people in different functions need to capture information on clients and depending on your role, you will need to access different parts of the information.
What is key is that people only have access to the information they require. You must ensure that information security is adapted to the different roles that people have.
It is also important to consider factors like retention; how long do you keep information for.
If you are a firm who has multiple regulators, different ombudsman, and different standards, how do you apply longevity and data retention when there are conflicts on this How can you ensure that you have taken the most prudent view that you can?
"Information security is another key element."
If you look back at March, a factor that became very important was continuity plans and whether DR situations and plans meant that if your office was suddenly unavailable, could you access all the information that you need to from anywhere; where is the information stored, is it stored locally in your office or in a private cloud somewhere else?
These are the kinds of data management controls and factors that we would look at.
Finally, you have a responsibility to your company, as you need to be protective of who you are working for.
You need to derive as much value from your data management process as you can, because at the end of the day you are a business and there is not an endless budget that you can spend on these types of processes.
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