The journey to a business-ready data management architecture begins with integration. What can firms do to avoid all-too-common stumbles? Industry experts at the BNY Mellon Asia Pacific Asset Servicing Client Leadership Summit in Singapore highlighted the importance of governance and questioned the assumption that real-time intelligence is the goal.
Fireside Chat: Data Management - Steps to a Single Source of Truth (From left to right) Dominic Lim, Chief Operating Officer, Investment Office, National University of Singapore; Scott Albin, Southeast Asia Consulting Data and Analytics Leader, PwC
The concept of a single source of truth is increasingly important today, with asset owners and investment managers wanting more timely, transparent and trustworthy data. But many firms struggle with the fundamentals: the foundational architecture and basic key performance indicators.
Scott Albin, Southeast Asia Consulting Data and Analytics Leader, PwC, revealed that this is sparking a shift in approach in the investment industry. “Moving to a single source of truth in a ‘big bang’ implementation program for data management is dying out. I’m seeing a much more iterative style of development — moving data sets from silo systems to data lakes, where the cost to maintain them is much lower, and also changing the approach to data governance at the same time,” he said.
New technologies, often implemented on the cloud, now allow companies to take the IT team out of the data provisioning process and put the front-office in control of data management. This unlocks corporate data and requires a new way of thinking. With more open data in the organisation, the people consuming the data now have to be trained to access it in more sophisticated ways and extract their own insights.
In this scenario, data governance is crucial, as Dominic Lim, Chief Operating Officer, Investment Office, National University of Singapore, explained: “You need a certain level of governance to define the single source of truth — to determine how you will label, manage and communicate it, as well as under what circumstances it can be transformed, how and by whom.”
In his experience, an effective way to achieve clarity is for the data user to set the parameters of data governance and determine who will be responsible for what. Transparency and enforcement make a huge difference to determining whether you have multiple versions of the truth or only one.
Mr. Albin echoed this sentiment. Companies can invest tens of millions of dollars to improve their data quality only to see it degrade again over time because they have not addressed the real problem: people-related processes under the governance umbrella. This covers who is accountable for the data and who defines the right calculations. An arrangement along these lines has to be in place to make the deployment of the technology needed to scrub, house and integrate data worthwhile.
With substantial technology investments in place, asset service providers like BNY Mellon are now changing their processes to move towards a more real-time portfolio view. How will this affect the Accounting Book of Records as a single source of truth?
“The Accounting Book of Records (ABOR) serves a particular purpose, but it does not give us all we need to make investment decisions. An investor that takes a long-term view is less concerned with real-time data, and wants comprehensive information about the portfolio—information that goes beyond the existing ABOR,” Mr. Lim said.
On the other hand, Mr. Albin frequently interacts with financial sector clients that want to re-engineer their data pipelines and systems to enable a real-time view. He urges them to determine precisely what they are going to do differently with the data in real-time. Do they need real-time data or is intraday data or even weekly reporting sufficient?
“The frequency of information needs to drive the decision process is key, otherwise the business case to invest in the technology to enable real-time view does not substantiate itself. This is a question around timeliness and the time-to-insight you need to achieve to be competitive — working back from this shows you what to invest in,” he explained.
How to bring together different sources of information, particularly the second-party data acquired from clients and the third-party data bought from vendors, into an ecosystem to support your decision making is also very important.
Experts also urged asset owners to accept the fact that some of the data they rely on as their single source of truth will be sourced from a third-party provider. The paradigm of ownership has shifted to the paradigm of access today. It is difficult to avoid the inevitable, nor the disruption that comes with it.
In creating the digital framework for their future data systems, companies need to prepare to access more data in the open ecosystem in order to benefit from data availability at speed.
BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may be used as a generic term to reference the corporation as a whole and/or its various subsidiaries generally. This material and any products and services may be issued or provided under various brand names in various countries by duly authorised and regulated subsidiaries, affiliates, and joint ventures of BNY Mellon, which may include any of the following. The Bank of New York Mellon, at 240 Greenwich Street, NY, NY 10286 USA, a banking corporation organised pursuant to the laws of the State of New York, and operating in England through its branch at One Canada Square, London E14 5AL, registered in England and Wales with numbers FC005522 and BR000818. The Bank of New York Mellon is supervised and regulated by the New York State Department of Financial Services and the US Federal Reserve and authorised by the Prudential Regulation Authority. The Bank of New York Mellon, London Branch is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. The Bank of New York Mellon SA/NV, a Belgian public limited liability company, with company number 0806.743.159, whose registered office is at 46 Rue Montoyerstraat, B-1000 Brussels, authorised and regulated as a significant credit institution by the European Central Bank (ECB), under the prudential supervision of the National Bank of Belgium (NBB) and under the supervision of the Belgian Financial Services and Markets Authority (FSMA) for conduct of business rules, a subsidiary of The Bank of New York Mellon, and operating in England through its branch at 160 Queen Victoria Street, London EC4V 4LA, registered in England and Wales with numbers FC029379 and BR014361. The Bank of New York Mellon SA/NV (London Branch) is authorised by the ECB and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request. The Bank of New York Mellon SA/NV, operating in Ireland through its branch at Riverside 2, Sir John Rogerson’s Quay, Grand Canal Dock, Dublin 2, D02 KV60, Ireland, trading as The Bank of New York Mellon SA/NV, Dublin Branch, which is authorized by the ECB, regulated by the Central Bank of Ireland for conduct of business rules and registered with the Companies Registration Office in Ireland No. 907126 & with VAT No. IE 9578054E. The Bank of New York Mellon (International) Limited is registered in England & Wales with Company No. 03236121 with its Registered Office at One Canada Square, London E14 5AL. The Bank of New York Mellon (International) Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. If this material is distributed in or from, the Dubai International Financial Centre (DIFC), it is communicated by The Bank of New York Mellon, DIFC Branch, (the “DIFC Branch”) on behalf of BNY Mellon (as defined above). This material is intended for Professional Clients and Market Counterparties only and no other person should act upon it. The DIFC Branch is regulated by the DFSA and is located at DIFC, The Exchange Building 5 North, Level 6, Room 601, P.O. Box 506723, Dubai, UAE. BNY Mellon also includes The Bank of New York Mellon which has various subsidiaries, affiliates, branches and representative offices in the Asia-Pacific Region which are subject to regulation by the relevant local regulator in that jurisdiction. Details about the extent of our regulation and applicable regulators in the Asia-Pacific Region are available from us on request. Not all products and services are offered in all countries.
The material contained in this document, which may be considered advertising, is for general information and reference purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter, and is not to be used as such. The contents may not be comprehensive or up-to-date, and BNY Mellon will not be responsible for updating any information contained within this document. If distributed in the UK or EMEA, this document is a financial promotion. This document and the statements contained herein, are not an offer or solicitation to buy or sell any products (including financial products) or services or to participate in any particular strategy mentioned and should not be construed as such. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country in which such distribution or use would be contrary to local law or regulation. Similarly, this document may not be distributed or used for the purpose of offers or solicitations in any jurisdiction or in any circumstances in which such offers or solicitations are unlawful or not authorised, or where there would be, by virtue of such distribution, new or additional registration requirements. Persons into whose possession this document comes are required to inform themselves about and to observe any restrictions that apply to the distribution of this document in their jurisdiction. The information contained in this document is for use by wholesale clients only and is not to be relied upon by retail clients. Trademarks, service marks and logos belong to their respective owners.
BNY Mellon assumes no liability whatsoever for any action taken in reliance on the information contained in this material, or for direct or indirect damages or losses resulting from use of this material, its content, or services. Any unauthorised use of material contained herein is at the user’s own risk. Reproduction, distribution, republication and retransmission of material contained herein is prohibited without the prior consent of BNY Mellon.
© 2019 The Bank of New York Mellon Corporation. All rights reserved.