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Private Fund Data Operations Should Provide More Protection

private fund data operations

COVID-19 has hit business leaders. It’s hit them with an endless parade of unexpected challenges. Leaders in private fund data operations are feeling it too. However, these challenges also present opportunities for technological advances.

Stretched Operations

Shrinking revenue and smaller budgets have reduced the margin for error. Risks are more severe. New risks are joining the ones that lurked in the shadows.

The time it takes to double-check numbers and make sure data operations are running smoothly is no longer a luxury. Fund administrators serving alternative investment funds, private equity, and venture capital are being stretched.

Exacerbating this are limited partners who are incredibly vigilant in checking investment reporting and statements.

Instead of relying on legacy systems that are dangerously susceptible to human error, this is the time to transition to an integrated platform that consolidates key data, automates processes with machine learning and adds clarity to data operations.

Operations Are A Worthy Investment

Moving away from point-to-point legacy systems to automated processes increases the speed of operations. And, it mitigates the risk of mistakes. Think about trying to say something fast and efficiently to a large group of people through a game of telephone.

The message gets garbled by the time it gets to its destination. So, moving to an integrated platform is like replacing the game of telephone with smooth, simultaneous communications. Get everyone on the same page.

Accuracy counts. It’s important to ensure your systems for managing data and fund operations are rock solid. Investing in good technology designed to improve operational productivity makes the business’ odds of running smoothly better. It will strengthen the business for what’s next when we’ve emerged from the crisis.

For many employees, remote work may end up being permanent. The accommodations being made now are becoming the norm. It’s crucial that the business’ operational systems sustain that transition as well. The move to automation can largely eliminate the risk of human error.

It can improve accuracy. However, that’s only true so long as there are checks along the way. Automation can also spread and multiply human errors if it’s not done right. Just look at Excel Macros, and cut and paste.

The goal is to remove human error from the data management equation. But, that does not equate replacing employees with automation. In fact, it’s a matter of putting energy where it’s needed, and in a way that’s simple.

The Best of Both Worlds

Get more simplicity out of complex internal systems. A fund can do it through automation. That’s even more important when employees’ efforts and the company budget needs to be aimed at keeping good investors calm.

In a crisis, human empathy is in high demand. If your team’s focus is on untangling accounting puzzles, their attention is not on the investor.

You’re responding to clients’ demands and getting more data online. You’re adding clarity. However, that also means clients need assistance adjusting to receiving services online. And, the volume of customer questions will only be amplified by the transition. Human connection is a vital tool.

Moving the management of business operations to an integrated platform frees up employees. It allows them to support customers in more personal, empathetic ways.

We’ve all found ourselves pounding “0� on our phone keypads in frustration to get past automated answering systems. Really, we want to speak with a human. In moments of crisis, people expect urgency, accuracy and empathy. They want to see clearly what is going on.

Implementing modern private fund data operations can deliver both. Automation means smarter, faster and more accurate data operations.  Employees are freed up to engage with customers.

Digital Doesn’t Have to Mean Complex

In a time when doubts are all around, business leaders still have a window to invest in security. That also means technological investments should be well researched. They should be checked ahead of time. Make sure they serve to improve the success of operations.

It’s essential that any integrated approach a fund goes after should first try to be more intuitive and easier to learn.

Funds need to integrate information from different places. And, they need to do it across the organization. So, funds have the general ledger. They have reporting systems, human resources systems, and market intelligence systems. None of these talk to each other. Really, they need to figure out a data integration strategy.

Before funds can ponder dashboards for people outside the fund, they need to consider internal interoperability. They need to consider ease of use. To move in this direction, they need to try to implement newer cloud-based solutions that will enable them to assemble data across the organization.

Everyone On Board

A good way to measure the success of new private fund data operations is how many employees are using it after integration. So, make data easy to get to, and easier to use by more people. That can help crack down on internal bottlenecks. Those jams can crop up when only a few people have a sincere understanding of how the system works. That limits progress.

Limited partners are focusing on capital statements. In fact, they’re relentless. But switching to an integrated platform can guarantee that statements will be error-free.

By taking advantage of the opportunities for technological wins, and investing in data smarts and fund operations, business leaders are aiming their businesses to emerge from this crisis stronger than before.

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Less Data Transparency Means Less Investor Trust

data transparency

The business world can take two lessons away from the countries that have been most successful in fighting COVID-19. Data operations, data transparency and clear communications matter. Those are particularly important lessons for asset managers that need trust almost more than anything else right now.

Singapore and data

Singapore’s initial response to the coronavirus (COVID-19) has been among the better in the world, though they are not out of the woods by any stretch.

Attention has been focused on what decisions Singapore, as well as South Korea and Taiwan, have made, and when they were made. But more attention should be paid to how those decisions became possible, and how they have been communicated. That is true for how these countries and their businesses approach economic contagion as well.

In many cases, efficient data operations have been the “how.� It’s a lesson other governments and businesses can learn in order to try to catch up to what is happening now, what will happen next, and what can happen after that.

Data operations

A review in The Lancet found that Singapore’s data and information handling during the pandemic has been superior relative to the rest of the world. South Korea has admirably rolled out testing and used geolocation data to identify whom to test.

China is faulted for not moving fast enough early enough. Transparency continues to be a concern. But once in motion authorities used mobile apps to support 14-day quarantines and infrared cameras in train stations to quickly identify travelers with fevers. Chinese authorities have to work hard to regain trust. Fears that something is being hidden will turn into more problems.

Contrast that progress with Europe, where cases in Italy have surpassed those in much-bigger China. European authorities have been called bureaucratic and often technophobic.

Transparent communications

It’s not just how data operations have enabled decision-making. It is how information is shared rapidly, clearly, consistently, and in detail.

We’re faced with a public health crisis where well organized and transparent data is crucial. Poorly organized data, shared inconsistently, leaves a vacuum filled by conspiracy and fear.

South Korea quickly deployed a central tracking app that publicly informs citizens of cases within 100 meters of their current location. Koreans have embraced clear and credible access to information. They want to make informed decisions. Citizens want data transparency. They don’t want hidden realities.

Taiwan has shared details quickly and openly with an analysis of COVID-19 mortality rates. These efforts provide every citizen with a war room dashboard that allows them to feel that nothing is being hidden. Singapore releases detailed information on each COVID-19 case.

Lines of communication

There has been a longstanding fear in the asset management world of allowing too much transparency. Nobody wants investors trying to grab the steering wheel. Due diligence to earn investment in the first place is one thing. GPs suffer frustration if the questions keep coming after the money has changed hands.

Allocators have built up their own data teams. They’ve pushed for more data, faster. To keep up funds and fund administrators have learned to build dashboards and to automate. But it hasn’t been with enthusiasm. There is a worry about setting expectations for data sharing that the fund will regret later.

When there’s no good news, there is anxiety over what the LP will believe they see in the data.

Funds will do better when they show trust first, share data, and have established the infrastructure to offer transparency. Asset managers will be in for more trouble than they’ve bargained for if they don’t fight disinformation with reliable data.

Image Credit: Savvas Stavrinow; Pexels

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