The sentiment amongst investment management firms right now is one of caution. Many are waiting to see how the Dodd-Frank Act will play out before implementing any of the changes that will be necessary in order to comply. The big question here is, is this a smart decision? Or will it simply hinder workflows and muddle transitions when it really matters?
From our vantage point, we can say that a smarter move would be to take advantage of the current state of the markets, and implement changes now. It would allow for a smoother, more accurate transition and time to fix any errors and/or gaffes. Hastily implementing changes before a deadline will prove to be more problematic and detrimental to workflow than anything else. In addition, implementing changes now allows firms to consider the bigger picture and really make changes for the better throughout the entire organization. Something not functioning the way it was originally intended? Now is the time to revisit those items and cut them or fix them. Byproducts of this process include streamlined workflows, increased operational efficiency and reduced costs.
Perhaps the most important reason not to wait to implement any changes: data management. Data is the crux of all the reforms which means then that data management will be the one initiative that firms need to get right in order to easily handle any upcoming regulatory reforms. Firms should be able to capture their data in real-time, standardize it and actually have access to it at any point in the day – with all the advancements in technology, there is no reason not to be able to do any of these. This means finding a technology partner who does not operate silos (more on this topic here.)
Proper data management will bring transparency to your firm, which will help grow the business in the long run, and it will bring transparency to the market in the even longer run, if each firm works to increase its transparency.
The point: each firm will eventually need to be able to capture data in real-time, standardize it and have access to it all day. The key to tackling this challenge is to prepare your firm now, rather than waiting for the last minute.
