This paper, based on an earlier piece by Duncan Wheatley, focuses on data aggregation challenges and solutions for asset reconciliation within asset management firms. The process requires consolidation of data from a number of external sources such as prime brokers and custodians as well as from internal accounting or order management systems - followed by posting the resultant data to the reconciliation system.
"Due to increased regulatory scrutiny and margin suppression, firms are seeking solutions to optimize data aggregation for better efficiency, cost savings, and transparency."
Asset managers may have to reconcile data from multiple custodians who are often chosen by the clients whose funds they are managing. As the number of relationships grows, so too does the complexity - potentially resulting in higher error rates and escalating costs.
With the increasing availability of timely data provided via secure ftp, or the intelligent use of custodian web portals, both in-house and outsourced automated data aggregation are now attractive and cost-effective options.