Firms Adopt New Tools to Aggregate Reports

Gone are the days when an investor with concerns about, say, Ireland's economy could be reassured by a phone call. Now investors, large and small, want a detailed report showing their exact exposures in all Irish assets, in all accounts, in real time. What's more, post-crisis regulatory changes -- both existing and anticipated -- will only add to the pressure on capital markets firms to provide increased transparency.

"Clients and regulators are demanding increased disclosure and more information, delivered faster," affirms Denise Valentine, senior analyst with Aite Group. "But firms are coping with multiple systems, multiple locations and multiple data formats."

Indeed, the responses to report aggregation demands at most firms have been manual and localized. Functionally, this has meant gathering and authenticating information across dozens, hundreds or even thousands of spreadsheets. Consequently, Valentine says, any technology solution that proposes to streamline report aggregation needs to do two things: work across silos and establish automated workflows.

In addition, report creation and delivery must be addressed by any enterprise solution. "A good solution provides desktop publishing capabilities with an interface that doesn't require you know desktop publishing," Valentine says. And, she adds, it should supply information in multiple formats across multiple channels -- over the phone, on the web or to a mobile device.

Fortunately, data and process management technologies are coming to the rescue. While there is no one path to the goal, firms are successfully pursuing cloud, hybrid and in-house aggregating and reporting solutions.

Head Start in the Cloud

At recently established Halyard Asset Management in White Plains, N.Y., report aggregation and delivery doesn't just occur in the cloud -- the availability of a SaaS-based solution is credited with making the firm a reality.

Prior to cofounding Halyard, principal Steve Boyd evaluated accounting, analytics and compliance systems at his previous firm to replace spreadsheet-based manual processes. Ultimately, he recalls, Clearwater Analytics (Bosie, Idaho) was selected for its features and minimal up-front requirements, both in terms of development and implementation.

Later, Boyd says, he knew the system would be perfect for launching Halyard. "Clearwater provided multiple types of functionalities in one system, with very minimal implementation," Boyd explains. "It allowed us to launch our business on Sept. 1, 2010, without a significant budget for software."

In addition to its cost-effectiveness, Clearwater also provided the necessary tool set, Boyd stresses. "The system is geared toward fixed-income but does equities as well," he says. "On the other hand, equity-oriented systems require significant development work to adapt them to also handle fixed income."

Although Halyard is both an asset manager and a wealth manager, a key benefit of using Clearwater is its ability to handle accounts with multiple managers, such as in family offices, according to Boyd. "Whether it's equities or fixed assets, we can look at aggregated information as one portfolio, break it down by individual manager or even view it by line item," he says. "That's a huge plus. Previously I'd have had to get the characteristics from each manager, standardize the data, plug it into a spreadsheet and manipulate it myself."

Compared to such manual data aggregation methods, Boyd says, adopting Clearwater was the right way to go. "Our goal is growth over the next three to five years, which we couldn't do if we were using spreadsheets for reporting," he asserts. "But, with Clearwater, we can do it comfortably without additional IT personnel or infrastructure."

And implementing Clearwater took less than three months -- with only one person dedicated to the project, Boyd adds. "It was as simple as getting permission from clients and providing custodian information to Clearwater," he relates.

"Then scrubbing chores occurred between Clearwater and the custodians. After Clearwater was comfortable, we checked the information against our portfolios. In some cases we went line by line; in others it was sampling," Boyd explains. Since going into production, he says, the solution has operated smoothly and nearly error-free.

A Multisolution Approach

On the other end of the solution spectrum, VSR Financial Services, a broker-dealer with a registered investment adviser (RIA) division, is taking a hybrid approach to client reporting by leveraging multiple technologies and vendors for its report aggregation stack.

The first layer is comprised of two account aggregating services, one for the broker-dealer side of the business and the other for RIAs. Adopted in 2005, each service was selected based on compatibility with the corresponding portfolio management applications that form the next layer, explains Chat Scruggs, CTO for the Overland Park, Kan.-based firm.

"For broker-dealers, the account aggregator CashEdge [New York] is integrated directly with the portfolio management application Albridge Wealth Reporting [Lawrenceville, N.J.]," says Scruggs. "And Albridge performs data reconciliation chores."

On the RIA side, CashEdge competitor ByAllAccounts (Woburn, Mass.) provides data for portfolio solutions from San Francisco-based Advent and Chicago-based Morningstar Office. Data, Scruggs acknowledges, arrives "reconciliation-ready," requiring VSR internal staff to perform reconciliation activities. "Since data received by ByAllAccounts and CashEdge is gathered from websites, our staff monitors any anomalies as it's transferred into our portfolio account applications," he explains, noting that reports for all of the portfolio management applications are based on custom templates designed by VSR.

Despite the manual reconciliation tasks for RIAs, Scruggs says, the net effect of implementing the aggregation stack of solutions has significantly reduced manual chores. Reports that took three weeks to deliver prior to adopting the aggregating solutions now are delivered in seven to 10 days, he points out.

And providing more timely reports has helped VSR Financial Services grow its assets under management and under advisement, Scruggs insists. "Eliminating the manual chores allowed for growth without requiring any additional IT staff," he says.

Recently, VSR decided to improve report delivery by leveraging its newly implemented enterprise content management (ECM) solution, OnBase from Hyland Software (Cleveland), Scruggs reports. "After we rolled out ECM in 2009 for other types of documents, we were looking for a more efficient way to distribute reports," he says. "It made sense to post them in our ECM solution, making the repository a one-stop shop for our registered representatives and advisers.

"After all," he adds, "the more time we can save for our client-facing force, the more time they can be in front of clients providing advice and gathering assets."

Going Their Own Way

For the New York-based alternative investments division at Credit Suisse, the answer to improving client reporting was building an in-house solution. "Our organization is comprised of multiple lines of business, which operate independently with separate middle offices but share a back office," explains Subhra Bose, formerly CTO of alternative investments at Credit Suisse.

"In the past, it took weeks to compile hundreds of thousands of spreadsheets to get exposure in a specific country, currency or asset type across all funds," he says. "It was even challenging to compute our assets under management."

In 2006, Bose recalls, he and his team envisioned unifying and streamlining reporting across silos. First, he says, they surveyed the various lines of business within the division to identify common workflows. Then technology options were explored.

"In addition to needing a data warehouse and a BI [business intelligence] solution, the key was not to disrupt the existing line of business systems or the front-office systems," Bose relates. Additionally, he reports, the team would undertake the project as an incremental build rather than a budget line item.

To meet all of the specifications, the alternative investments tech team considered stand-alone solutions. "Stand-alones tended to be good in one area, such as operational reports or accounting reports or risk analytics," says Bose. "So by going that route, we would have copied the same data into multiple locations."

But the team wanted a single repository, where operations, front office, risk, compliance and MIS would all work with the same data. "So when there is a change in the position of the fund," Bose explains, "we'd no longer spend hours or days reconciling the differences between each of those groups."

Ultimately, the company decided an in-house solution was the best answer. A Microsoft (Redmond, Wash.) tool stack -- including a SQL Server data warehouse, SQL Server Analytics and SQL Server Reporting Services (SSRS) -- was selected as a back end. And for the front end, SharePoint was used to build portal user interfaces, with Windows Presentation Foundation (WPF) rounding out the system for rich desktop presentations.

Yet a SQL-enabled solution was initially met with skepticism, Bose admits. "A lot of people didn't consider SQL Server sufficiently scalable for a data warehouse," he recalls.

To overcome this perception, the team quickly built a demonstration system within a development environment. "In less than three months we demonstrated a solution to the business side," Bose says. "They were very excited. Then there was no stopping." For the next year, according to Bose, the team took an iterative development and delivery approach, introducing new features and functions about every six weeks.

And the solution has continued to evolve since its full launch in 2007. For example, data inputs initially were updated overnight, cutting aggregated report generation from weeks to a day. Then expectations began changing, Bose says -- updates moved from overnight, to intraday, to hourly. Most recently, he reports, they became intra-hourly.

Going forward, Credit Suisse's alternative investments division will work on report standardization. "They're working on standardizing across funds," Bose affirms. "Clients want to receive reports in a normalized form."

Meanwhile, the benefits of the system have piled up. "We've literally empowered fund managers with the capability to make more accurate investment decisions," says Bose. "Instead of manually generating reports, people are adding value to the business. And the manual systems were very error-prone, so we've reduced risk considerably."

Anne Rawland Gabriel is a technology writer and marketing communications consultant based in the Minneapolis/St. Paul metro area. Among other projects, she's a regular contributor to UBM Tech's Bank Systems & Technology, Insurance & Technology and Wall Street & Technology ... View Full Bio