When it comes to information management, companies can be like the sailor who, in a 19th century poem, exclaims, "Water, water everywhere, nor any drop to drink." For financial services firms, potentially useful data springs from a multitude of sources, including call centers, transfer agents, brokerages, Internet contacts and portfolio managers, and in a variety of forms. The challenge is to channel that flow of information so that it becomes a useful resource.
Today's competitive environment makes instant access to real-time information an urgent priority. Efficient data management can lead to improved customer loyalty and asset growth. In-depth sales data can sharpen the focus of a marketing campaign. Tracking the activities of individuals and business units can produce operational efficiencies.
The financial services industry has struggled for years to create effective data-retrieval systems. Collecting information in diverse formats from multiple sources and compiling it into a usable reporting tool or document has often been a labor-intensive project, requiring an abundance of input from the information technology (IT) staff.
Finally, the data repository has emerged as a solution to the information management challenge for financial services firms. With a combination of a robust processing model and open technology architecture, a data repository, such as one provided by PFPC, can offer a wealth of information critical to making informed business decisions.
A data repository should be more than a storage bin. Properly configured, the data repository enables a firm to collect, integrate and analyze information from internal and external sources and develop sophisticated reports for purposes ranging from performance measurement to compliance status. To perform all those tasks, a data repository should have these four important features:
Open architecture: The data solution must be able to connect with legacy applications such as transfer agency and omnibus accounting, as well as external data sources such as brokerage systems, and translate or normalize the various streams into a common language in a unified data store. With an open, flexible architecture, all data is routinely updated and available for immediate use.
User-friendly reporting: The business user, whether a portfolio manager, marketing director or compliance officer, should be able to submit inquiries and receive custom reports on his or her desktop. A programmer should no longer be needed to run sophisticated, detailed reports.
Robust technology: The data collection, integration and reporting capability must be powerful enough to quickly generate accurate, up-to-date reports at any time, with a robust graphic presentation that illustrates results in a compelling and professional manner.
Security: While the data solution must have the capability to customize views and mix and match information from multiple sources, the unified data store must be housed on a secure server that preserves the integrity of all data in its original context.
A key advantage of this type of open architecture solution is that it can be outsourced to a service provider. In the past, funds and brokerages might have built their own proprietary data warehouses, investing heavily in systems and the technology staff needed to run them. But a data repository can be purchased as part of a suite of services, including such traditional processing services as transfer agency, custody, fund accounting or omnibus accounting. With the right service provider, funds and broker/dealers can have better access to data, and get higher value from it, without the burden of expensive hardware purchases or dependence on IT professionals.
For example, sales and marketing reports take on new depth and provide greater value if they can integrate information from all channels, including direct sales and a breakdown of broker sales by region, office or individual representative. A service provider may furnish transfer agency or omnibus accounting services, while the client maintains its own brokerage. With the proper approvals, data from all sources can be collected in a data repository and displayed on a desktop in a variety of formats to spot trends and identify critical markets.
The capability can also be used to optimize sales strategies or staff utilization. Every financial institution has multiple contact points with customers and clients. With an open architecture data repository, a firm can track all sales contacts to better understand the client base and determine more cost-effective ways to reach certain segments. The reports can look across the enterprise or drill down to check the amount of time a call center employee spends handling a shareholder request.
Most important, perhaps, in today's regulatory environment is the capability to collect data from multiple sources to provide customized reports on market timing, breakpoints and other compliance information. A quick response to an auditor or regulator has value within itself. With a drill down capability, the data repository can also isolate suspected improper trading and take action to protect clients. In that situation, data can be transformed from a commodity to a precious resource in the competition for market share and customer loyalty.
Rheeta C. Wise is managing director and senior vice president of shareholder services at PFPC.
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