How did we get here?
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So why are organizations’ data flows at a breaking point today? This section outlines five ways the industry is changing and creating new pressures on investment efficiency.
Exploding points of interaction
As Canadian investment portfolios across new asset classes and global markets, the number of data connections has grown exponentially. For example, an investment manager may historically have relied on a single custodian to perform traditional functions for their investments. Today, managers have many demands and can face multiple providers providing different functions (each managing individual markets or third-party mandates). As well, alternative asset classes often demand attention from specialist providers of risk management or valuations. Every new connection poses the risk of a new vulnerability.
More assets, more markets, more data
As organizations diversify their portfolios by investing in new markets and asset classes, they not only increase their data connections—but also the types and complexity of data they need to manage. For example, a single portfolio will rely on market close prices, broker quotes and benchmark rates. The introduction of any new asset classes, data sources or service providers makes it harder to create a unified view of the portfolio and increases the complexity of managing the assets. For example, the more diverse the portfolio, the more data types and mapping tables are required to create a cash projection—and with that, the risk of relying on the projection to make business decisions. RBC Investor Services aggregates and normalizes data across sources, enabling clients to access accurate near real- time cash projections, allowing them to manage their portfolio and make investment decisions with greater confidence.
Regulation raising the stakes
And what happens to all these tables when a regulator changes the rules? Regulatory shifts like T+1 settlement and new reporting requirements under Europe’s Securities Financing Transactions Regulation (SFTR) and the SEC’s Rule 10c-1a are forcing firms to rewire their data flows and increasing demand for real-time reporting. T+1 demands real-time updates across the trade lifecycle, while transaction reporting now requires new data sets to be created to report every trade (including 155 new fields for SFTR) at increasing levels of frequency. In Canada, growing volumes of regulatory inspections and data requests (e.g. from OSFI) are already a common challenge, while ongoing consultations around mandatory trade reporting and fails discipline will only increase data management pressures. Legacy systems are being pushed beyond their limits to meet these growing demands.
Expectations changing fast
It’s not just regulators driving the change. Investors and clients now expect greater levels of visibility and control; they prefer real-time, self-service dashboards, not static, end-of-day reports. With the onus shifting from reporting to empowerment, investment and wealth managers are now being managed and selected based on the scalability and resilience of their data infrastructures. Today’s expectations are about flexibility and delivery channels—meeting an organization’s individual needs while remaining anchored in a trusted, single source of truth.
Rising demand for instant data accuracy
Internally, the bar for acceptable risk and delay is significantly higher than it once was. As the velocity of markets accelerates, data demands have increased exponentially. Firms can no longer afford to reconcile exceptions weekly or monthly; every inconsistency should be resolved in real time. With the focus that used to go into a month-end valuation now part of everyday operations, previously acceptable levels of tolerance breaks or issues are now attracting daily attention, driving the need for remediation.
“Every client wants data that’s fast, clean and ready to act on. That’s what we deliver.”
Joel Kornblum
Head, Business Development & Relationship Management
Data accountability resides within the RBC Investor Services business
RBC Investor Services has a robust governance model in place across our data lifecycle to manage and control data, ensuring it’s safe, secure, accurate and trusted by clients. Data accountability resides within the RBC Investor Services business, and our Data Management Office plays an important role in the adoption and execution of enterprise-wide data standards and best practices. A central, multi-disciplinary governing body oversees our data activities, ensuring they align with business objectives.
