The Culprit Slowing Automation in Asset Servicing
Nearly 60% of the challenges to automation in asset servicing stem from data issues, according to Broadridge survey results released this month. Asset managers are deploying artificial intelligence tools and looking to automate and scale firmwide functions, but these tasks require clean and consistent data.
The need for staffers to manually reconcile inconsistent data is a drag on productivity, and can increase risks for errors, said Dave Likens, vice president of portfolio services at STP Investment Services. The more hands data passes through, the higher the chance of errors creeping in, he said.
“Having spent most of my career in back- and middle-office operations, I’ve seen firsthand how often corporate action errors stem from the need to interpret incomplete or non-standardized data,” Likens said. “Firms attempting to automate these complex event processes often find that inconsistent source data introduces additional risk, despite best intentions.”
Post-trade settlement depends on close coordination between brokers, custodians and operations teams, said Kaisha Schnoll, vice president of trade settlements at STP. When this process is automated with clean, standardized data, it operates more efficiently and with fewer errors, she said.
However, fragmented systems and inconsistent data continue to cause frequent errors and are slowing progress on automation across the industry, Schnoll said.
“Data quality has become a key differentiator,” Schnoll wrote in an email. “Firms that integrate trade settlement and asset servicing workflows, strengthen data governance, and invest in automation are seeing tangible reductions in error rates and operational risk.”
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