Changing tack: embracing ‘interoperability’ and decentralised data management 

AlphaCert COO Scott Taylor comments on key insights from the Fund Summit.

The 9th Fund Summit in Melbourne highlighted the emerging trend towards data decentralisation and governance – looking at how firms can leverage interoperability within their service provider ecosystem. 

AlphaCert Founder and CEO Phil Pietersen was part of a thought leadership panel presenting on megatrends happening across the industry, specifically looking at technological advancements and how it shapes data management.    

The emerging trend of decentralised data models is a fundamental shift and has been occurring over the last ten years.  

Decentralised data management refers to the use of multiple platforms to store and manage data, shifting away from the centralised model where all data is stored and managed in one system.  

This approach ensures data can be shared and exchanged easily and effectively, making it available to more people and systems to be used and analysed – promoting an increase in insights and knowledge that can be used to improve overall decision-making and performance.  

Data Evolution 

A decade ago, data would be pulled from custodians, fund managers and market data providers into a single source of truth for asset allocation, with a focus on then pushing that data down to investment reporting, board reports and quant analysts at speed. The data aggregation that pulled this source data through to the single source of truth and pushed it downstream was typically completed manually, on spreadsheets. 

What has evolved over the last ten years is the emergence of data scientists and the concept of a data lake, with many more specialist data aggregation tools that sit at the heart of data architecture. In addition to this, there has been an increase in the number of applications that sit alongside these aggregation tools, highlighting the notion that there is also an increasing number of sophisticated users using the data and the platforms needed to analyse it.  

Another change in the evolution of data has been the acceptance of Bronze, Silver and Gold data standards – which sees the category increase according to the quality and value of data. Bronze data includes basic data ingestion in raw formats, Silver data is data that has been transformed, often processed or filtered making it easier to analyse, and finally, there is Gold data which has its final aggregations and provide its fullest context. Gold data is the highest quality data, having reached its most valuable state for data scientists to analyse and for wider use across the organisation.   

New Technology influencing data strategy 

New technology solutions now exist in the market which drives the concept of de-centralised data and database-to-database connectivity. Emerging technology can influence data strategy by providing new ways to aggregate, store and analyse investment data – enabling those in the industry to more effectively identify trends in datasets, in an automated, timely manner. This inherently improves decision-making, backed by greater security, increased risk management and higher reliability of enriched data.  

Emerging technologies in this space not only result in better decision-making but also see the ways of working shift completely. The historic trend to email files is now replaced with database-to-database integrations. Risky offline processes have been reduced, if not eliminated, with the ability to store everything in secure environments.  

Now that data does not need to be centrally maintained, it can exist in other special systems or repositories – a trend that is resulting in a fundamental shift in a fund’s data strategy. New technology can provide experts with verified and comprehensive data, that is consistent through all connected platforms to improve decision-making and achieve better returns.   

Data Governance 

With the continuous evolution of data, data scientists and aggregation tools, data governance remains key within organisations. In fact, data governance is critical within the decentralised model. The notion of a decentralised data model not only makes data governance critical but is also a fundamental shift in the way data strategies are being created – allowing more distributed decision-making and collaboration.  

Data is an asset that is embedded across an organisation, so by embracing decentralised data management, organisations can shift the management of data from a central control to all relevant stakeholders. It is integral that strong data governance is in place, to ensure the privacy and integrity of data aren’t comprised with this decentralisation.  

In the session, Phil touched on the rise of decentralised data models enabling the link between investment and member data. Both structured and unstructured data are changing constantly, and the interoperability of data management now allows for increased transparency and collaboration. This linkage will help funds make better investment decisions and it will help drive member engagement with quality analytics. 

Please contact us to find out more about how AlphaCert can help by aggregating all your key data sources, overlaying a data governance structure, and providing the best tools to integrate with your existing investment systems.