07 November 2016

Hedgeweek: The virtues of good data governance

As asset managers face a barrage of global regulation and compliance demands, one of the biggest challenges they face is knowing who is responsible for the firm's data and where its source is located.

This requires having a proper data governance framework in place to control how and where data moves from source to a range of various outputs required for regulatory and fund distribution purposes.

"Speaking to the CEO of a US asset management group recently, when I asked how they currently feed data to their distribution partners, they did not know the answer. What we discovered was that in fact no one was doing it. A salesperson had signed a distribution agreement with a platform partner, set the fund products up on the platform and sent the necessary information, but then left it," recalls Lee Godfrey, Deputy CEO of KNEIP, one of the industry's leading fund data and reporting specialists.

With PRIIPs regulation looming large, control over the accuracy and consistency of fund data is paramount. Not only for regulatory reasons but also for credibility reasons. KNEIP uses the same data that goes to distribution platforms to send out to data vendors and to generate myriad legal and regulatory reports. By helping to control the movement of clients' data, KNEIP is able to improve the efficiency of its clients' sales teams.

"As was the case with one of our clients, not having to spend time explaining such discrepancies can increase a sales team's efficiency by 5 per cent," says Godfrey.

A proper fund governance framework will–when a fund manager knows what the required output is–allow them to reliably source the data to produce the requisite output.

Rather than responding with a kneejerk reaction to each new piece of regulation and throwing the kitchen sink at the problem, proper data ownership simply means adapting the dataset to produce a different output.

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