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The essential link between reconciliation and golden source data

Todd Sloan - Buy-Side Solutions Strategist
The essential link between reconciliation and golden source data
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Investment managers maintain multiple copies of the same data throughout their post-trade environment often relying on manual activities to distribute and reconcile internal data movement. As more investment managers embrace the use of a central data repository to store important investment accounting and client-related information, it is increasingly important for reconciliation to play a key role to ensure all related systems across the front, middle and back offices are fully synchronized using the same golden source data. By doing so, firms can eliminate or significantly reduce the risks associated with delivering inaccurate or outdated information to downstream systems.

 

Manual Data Distribution Processes

Often, the distribution of data between internal systems is a manual process where the end-user interacts with some type of data entry screen. Whether the data is related to security master information, pricing, corporate actions, security position balances or simply entering a trade in a blotter, the movement of data must be reconciled to avoid a potentially catastrophic event with a downstream system that acts on erroneous or out-of-date information.

 

Insufficient Audit and Reconciliation Capabilities

Another key challenge with data distribution is the lack of audit and reconciliation capabilities found in the systems receiving new or updated data. For example, when an OMS and accounting system receive security master updates from a reference data utility or data warehouse, it should provide an audit trail or reporting to reflect the:

  • Number of security master rows imported
  • Number of updates made
  • Reconciliation of the security master data elements (i.e., security ID aliases, maturity date, security description, etc.)

 

Far-Reaching Security Position Information

The same can be said for security position balances where almost every area of the business needs to understand what is held to perform their duties. Consider the following areas that rely on accurate security position information whose origin may come from a data warehouse:

  • Trading - the number of shares or units available for trading
  • Corporate Actions - the number of shares owned and what is eligible for a particular corporate action event
  • Billing - what securities are held as part of the market valuation and client invoicing process
  • Accounting - P&L and NAV reporting require information about what and how much of a security is owned
  • Securities Lending -how much you own and what portion is out on loan

 

The Crucial Role of Reconciliation

Electra supports all these reconciliation scenarios, allowing for the comparison of any number of data elements across any number of data sources. Whether an investment manager is looking to see that all systems are using the latest pricing information and security master data, or simply comparing CRM data between Salesforce, accounting and client billing systems, a highly flexible, robust reconciliation solution will pay huge dividends over time.

 

 

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