For investment managers, data aggregation is a fundamental component of their role day-to-day. It is also one of the most complex parts – but it does not have to be.
Often working with multiple data custodians, investment companies have to aggregate all the data — a process that, when using legacy workflows, is not only extremely labour-intensive but also highly prone to error.
When data aggregation is done correctly, it enables investment managers to optimise a number of business processes, from effective risk management and operational efficiency through to improving portfolio performance.
Data aggregation is, at its core, the process of taking multiple data sources and combining them into one single source. Organisations have long done this, but it is often a laborious task, involving many Excel spreadsheets and hours of daily work for key stakeholders.
Aggregating data from multiple custodians into one single source is essential, not only in regards to reporting but also for compliance and the overall goals of the business. However, managing that data is no small feat.
One of AlphaCert’s customers imports data from five different custodians, as well as daily transaction and positioning files from internal systems.
Every day, the company gets five different sets of data that may or may not say the same thing – which can be challenging when manually managing that number of datasets. To be able to use this data effectively, all data sources need to have business logic applied, been run through a set of rules, and mapped and de-duped before they can be used in reporting or as part of business decisions.
In utilising the AlphaCert platform, organisations can aggregate data from custodian banks, market data providers and internal teams, enriching and validating the data to create a more comprehensive and manageable dataset for analysis, reporting and further usage. The platform implements operations from merging data through to calculating summary statistics or grouping data to specific criteria.
As part of the wider Extraction, Transform and Load (ETL) process, AlphaCert maps the data, dedupes and cleans it, before loading it into a system or report. Additionally, this process allows organisations to put rules, filters, and other calculations into that ETL part of the loading. Through identifier matching, this also helps ensure the quality of the aggregated data and makes certain it is exactly what the user needs.
Organisations need to see the different data sources consolidated in order to make accurate comparisons that are fundamental for utilising the data for analysis and business decisions. This is highly important for investment managers and applies to numerous scenarios – for example, wanting to see the total fixed income for a specific portfolio or an entire fund.
Without automatic processes in place, this is not only an extremely time-intensive task but is also dependent on key people for business knowledge.
Data aggregation using legacy workflows is traditionally labour-intensive and prone to errors. Investment companies that have not automated the aggregation process need to use cumbersome spreadsheets to reconcile all the data from the different custodians.
Using AlphaCert for aggregation helps automate all manual processes, reducing the risk associated with those, and eliminating the dependency on a key person for that business knowledge.
Custodian systems will produce their source file with identifiers that are specific to that system (and may not match a source identifier from a different custodian system). With AlphaCert, customers can have an identifier service to help match all the different identifiers. Once the data is loaded in and identifiers are set up, the system itself can reconcile the funds, positions and portfolios automatically.
As mentioned above, AlphaCert’s customer receives data from five different custodians and prior to working with AlphaCert, used spreadsheets with all the identifiers to aggregate this data which required manually reconciling all the different data sources on a daily basis.
Sometimes these identifiers matched, oftentimes they didn’t. It required manually pulling down files, saving them from emails and portals in all various formats, then pasting it all into a different spreadsheet to reconcile – it was very manual, time-heavy and prone to error.
The organisation now has its entire process automated, enabling them to have a comprehensive, single view of their portfolio, improving the accuracy of their reporting and removing the risk associated with manual processes.
Additionally, the AlphaCert platform keeps a history of any changes made, providing customers with an audit trail of exactly where their data was sourced and all subsequent changes made, both via automated processing or the AlphaCert UI.
The organisation is now looking at implementing exception reporting, for their non-reconciled positions – a further step into automating their data aggregation with AlphaCert.
Investment managers looking to streamline their processes and make more informed business decisions should move away from complex legacy workflows and embrace automated data aggregation.
AlphaCert enables companies to automate data aggregation and provides investment managers with a single source of truth for all their custodial data. Get in touch today to find out how AlphaCert can help you aggregate data from multiple custodians into one single source of truth.