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Data quality in finance could mean warehousing

Rachel Wheeler Archive
Keeping investors informed is critical in finance. After the staggering losses many took in the 2008 financial collapse and following recession, financial speculators could be far more likely to place their trust in known quantities. Hedgeweek recently interviewed UMB Fund Services' Lonnie Macdonald about the place data quality holds in the process of selling investors on a fund's offerings and making a particular approach attractive and enticing.

Demand drives management
Increasing the integrity and availability of financial information is directly driven by requests from investors and their advisors, Macdonald told the source. He noted that funds have devoted more time and resources to information-enriched descriptions of services in recent months. He suggested that companies need the ability to create a report containing hard data on request, giving clients peace of mind through facts and figures.

Many of the systems needed to compile a factual report on a fund do not work together well in their unaltered forms, according to Macdonald. He told Hedgeweek that companies can use data warehouses to compile information and prepare for the critical questions prospective customers and their advisors will ask.

Macdonald has observed many motives for the recent increase in demands for data access. He noted that transparency is currently at a premium. Investment advisors now want to know exactly what component parts make up a fund. That, combined with increasingly complex regulations and a number of other factors, has ensured that high quality data reports are now the order of the day in hedge fund management.

General banking need
The specialized investing field is not the only market segment affected by increased availability of customer data. Computerworld contributor Susan Feinberg singled out three types of data that banks need to focus their governance efforts on. One of those was figures given to customers, as accuracy in this area creates an important bond of trust between customers and their banks of choice. Depositors need to know where their money is at any time, accurately, to feel confident.

The other two types of data Feinberg singled out serve different purposes but are similarly critical. Transactional data used internally by the banks themselves is the lifeblood of the financial system, and she predicted chaos in cases where its integrity fails. Information released to regulators must also be clean and well-managed, as reporting problems could lead to fines or sanctions from the industry's governing bodies.