Regulation is relentless: growing reporting and fund transparency requirements means more fund data extraction for fund managers—a process which can be both expensive and time consuming. It is time to think how to use this valuable data, which has already been generated for compliance purposes,to improve business in other ways.
Here are KNEIP’s top three smart ways in which fund managers can get more out of regulatory data:
1. Manage your firm’s regulatory data on a centralised platform
Many firms are dealing with transparency regulation by struggling with each new set of requirements as a separate project, essentially dealing with each new regulation as it comes through. This is very time-intensive.
A more efficient method is to collect fund data on a platform that can be accessed whenever a new piece of compliance reporting needs to be done.
In theory this sounds simple enough, but can be challenging to setup. This is because you are dealing with various families of information and each regulation will require different types of data, and different risk calculations to be performed. Managers need to plan carefully, otherwise it may end up causing more issues that it solves.
2. Think carefully about what your organisation needs and bring in new talent
Many firms are looking at bringing in new talent to help treat regulatory data. Fund managers are taking different approaches to this, based on what they need. Some have focused on hiring technology-specific personnel in order to help with processing information, while some have opted to hire new staff with a more mathematics-specific background to deal with the analytical aspects. Fund managers should think carefully about what they need before acting.
Outsourcing is also an efficient option, especially for those who do not want the long-term commitment of employing full time members of staff, or do not have the resources to handle it internally. They would benefit from the input of a dedicated regulatory expert.
3. Use your data to help inform your own internal control mechanisms
In 12-16 months, the volume and pace of regulation is likely to slow down. But that does not mean that the significant amounts of data that has been amassed need to go to waste.
Much of this data can provide valuable insights into your organisation which otherwise may not have been generated. Therefore fund managers should use this data to better inform their internal control mechanisms.
Meeting regulatory requirements is always tought, but also inevitable. The best approach then is to look at the benefits one can get for the company while introducing new reporting solutions, be it by own means or outsourcing them. The most valuable advice is: remember, the glass is half full!
By Lee Godfrey