How RIAs Boost Efficiency Through Data Integration

Data integration allows for quality data. Quality data is a foundation for success across all areas within an organization.

When some people hear words like "data integration", they immediately  think, "it's just a bunch of 'IT Speak.'" It's a technical concept that only applies to the IT department, right?

It certainly matters to IT, but it's important for you, regardless of your position in the organization.

In one of our previous posts, we mentioned a PwC publication, stating 2020 should be the year that firms take on a proactive, data-driven strategy for for their operations.

We agree that now is the time to prioritize data. After all, data-driven companies are 58% more likely to beat revenue goals.

In this post, we will explain what data integration is and how it helps RIAs become more efficient.

Data Integration Definition

Data integration is a term used to describe the combining of data points across multiple systems and bringing that data into a single place.

Consider this: You have a portfolio accounting system, a trading and rebalancing system, a trade order process management system, a CRM system, and many custodians.

Instead of logging in to each system to access the data, what if you could see the data from all those systems in one place? What if you could update the information across all systems from that one place? Data integration makes both possible.

How Data Integration Boosts Efficiency for RIAs

Saved Time

How long does it take logging on to each platform or custodian website, looking for data points or files, downloading them, and manually extracting that information into a spreadsheet or other system?

Do you ever forget passwords? With so many different locations, it's easy to lose track of things.

Depending on frequency of these occurrences, you'll find it a time-consuming process hunting down all that scattered data. And when you do the math, you'll find it's a costly use of time.

As mentioned in the definition above, integrating data is all about bringing data points from all locations into a single place.

That is possible through things like custodian data feeds, where trade data from the likes of a Schwab or Fidelity can flow right into your portfolio accounting system.

It's also possible through APIs (application programming interfaces), which allow different systems to communicate with each other. "Communicate" in this context means they can share data with each other, and updates you make in one system can be updated in the other systems. In the end, it means considerably less time spent on the more manual tasks with data.

Another way is to automate the data-gathering processes. In one of our previous posts, we explain how programmed bots can handle manual and routine functions.

RIAs undoubtedly benefit from such integration, and our TAMP1 platform provides a singular place for RIAs to view all clients' personal and investment details. Similarly, clients can use TAMP1 to view their portfolios and reports.

More Data Accuracy

Just as firms save time not having to find, download, extract, and enter the information manually, they also find their data is more accurate because of integrated data.

Manual work leads to errors. People get tired and distracted. They are bound to slip up from time to time. With routine and mundane processes, it's easy to fall asleep at the wheel.

If this were a classroom setting, you would be praised for having 95% of the data accurate. After all, that's an A. Heck, even if you got 70%, you could still pass the class.

But when it comes to managing other people's money, classroom standards do not apply. One small mistake will throw off performance completely, eroding clients' trust in your reporting. 100% accuracy is expected every time.

As long as the systems are connected, automated processes are confirmed, and fields are mapped properly (i.e. data set from X-system must populate specified field in y-system), then you will surely have perfect accuracy.

Saved Money

Should there be any upfront costs with integrating the data and having everything function as you wish, it's worth the investment.

It's worth investing in a process that gets everything done right; otherwise, it's more time and money spent going back to fix what should have been done properly the first time.

If you can save x-number of minutes or hours each day over the course of a year or more, that's real money you're talking about.

The amount of time saved can instead be used to focus on higher-value, revenue-generating activity. Check out one of our earlier posts on where human talent is needed most.

Better and Faster Decision-Making

Think about it. Less time spent chasing down data and more time analyzing data will allow for better decisions.

Having accurate data in one place, thanks to integration, lets investment managers see client portfolio details in real-time. With more time to focus and without delays of information, you can make prudent investment decisions in a faster time.

Efficiency Gains Realized Through Integration

RIAs most definitely boost efficiency through data integration, as we have illustrated.

Whether it's getting the data feeds and systems properly communicating with each other, build automated solutions to get data from point A to point B, or moving to a TAMP like ours, you have options.

It's ok if you do not have the technical wherewithal to implement; you can reach out to third parties to help.

At a minimum, what you should take away from data integration is getting used to the idea of centralizing data and making the necessary information easily accessible to those who need it. Think about ways how good data can affect all aspects of business, be it investing, accounting, compliance, marketing, client servicing and prospecting.

Improved workflows by improving data quality and management is thus foundational to success across the organization.

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