Ops Needs an Accounting & Data Warehouse Paradigm Shift

Operations teams need to shift away from multiple outdated accounting systems and data warehouses and toward an ecosystem that allows for these and related systems to talk together in real time, says Kirk Littleton, sales director at FundGuard, in this edition of the FTF Exchange podcast. These changes will definitely yield firm-wide benefits, including those for performance measurement and client reporting teams especially if firms embrace updated application programming interfaces (APIs) and data buses. “So, I think the operations people need to kind of have a paradigm shift to say: ‘I don’t need multiple accounting engines, I don’t need a big data warehouse to be the agent to push the data into other systems,’ ” Littleton points out in the podcast. “Let the APIs, let the[Apache] Kafka, the [IBM] MQ buses move that data in real time from one source to one receiving system that needs that data. Performance and client reporting are great examples,” he adds. “They need data that has been verified and accounted for properly and then I can use it in my performance calculation or I can put it on this client statement. But I don’t want to do that through a data warehouse where the data might be stale at the time I get it.” However, many firms cannot yet embrace APIs, Kafka buses and beyond because “many of the systems that are still in place today do not support those types of technologies,” Littleton says. “So, as a result, you’re still stuck with: ‘Okay, how am I going to get this data in real time from this engine to the trading system, order management, the client billing system — whatever middle office or front office tool you’re talking about.” Littleton discusses in detail some of the ways forward:  Modernize accounting systems — some systems are 50 years old;  Embrace cloud-native solutions;  Support systems that use artificial intelligence-based technologies particularly machine learning;  Move to systems that have multi-asset class coverage; and  Consider a multiple book strategy that encompasses IBORs, ABORs, performance books, and custody books to provide multiple views of a portfolio all at once. “I want to be able to go to that accounting system in real time through an API and pull the data back and then act on it. So whether I’m an OMS trading system or a performance system I want to know what I own in real time. I want to know the value of that asset in real time, any cash flows that would affect performance – I need to know that type of stuff in real time,” he says. FundGuard is a cross-enterprise, AI-powered, cloud-native and multi-asset class investment accounting platform for asset managers, asset owners, custodian banks and fund administrators FundGuard is a sponsor of FTF’s Performance Measurement & Client Reporting event taking place on Feb. 29, 2024, at Etc. Venues, 601 Lexington Ave. in New York City.