Report View Relativity - Part 1: What is “Truth”

Report View Relativity - Part 1: What is “Truth” John Wise, Founder and CEO What is truth? When it comes to financial reporting it depends on who is asking.

A wealth management client wants the context of a long-term performance against plan; an institutional investor is most focused on GIPS compliant performance against a relevant benchmark. The firm’s owners would be more concerned about a real-time view of the profits and losses on open positions while the firm’s accountant might be looking for taxable income based on GAAP. There are board views, trader views, risk and compliance views and what they all want is the “truth” that they need to be effective in the role they play.

Breaking Down the Silos The systems to produce these various views and the analysis that derives them have historically been served by the quilt of legacy applications - often working in siloes connected by homegrown Excel bridges. The lack of integration and difficulty of deriving these views were still sustainable in a world of quarterly reporting cycles. However, with the Internet’s growing 24/7 reporting expectations from all of a firm’s constituencies, the old way is breaking down.

From InvestCloud’s team members whom have more than 20 years of experience in data warehousing and financial services application design, they saw that the cloud was driving things in a direction that legacy systems and business processes could not address. The financial industry would just layer browser front-ends over remotely hosted legacy applications. This is not a bad approach but it will only temporarily protect their installed bases and overlook some of the most valuable aspects that a true cloud application can do. It misses the higher security potential and rapidly progressive functional capability of a true single instance cloud platform.

Rebuilding the Warehouse We believe that there were three fundamental problems that had to be solved in order to master this new paradigm. The first problem was retiring disparate data sources and replacing them with a single, central, integrated data store. Our solution, as we have discussed in previous postings is called PLACE® (primary location of access, control and entry). Since a decade ago, this area was called

data warehousing and InvestCloud’s previous company Netik was a pioneer in the data warehousing space. Re-engineering this concept for the cloud, InvestCloud knew that the dusty stacked-box metaphor of a warehouse would not work. With that knowledge, InvestCloud needed a term that communicated the real-time goal we were pursuing; therefore, we created a unified data store, IDR® (interactive data repository) – a dramatically faster and more responsive version. InvestCloud’s IDR is not only fast enough to make real-time profit and loss reporting possible but also fully integrated with market pricing, news, social media, custodial and banking data. It is the foundation of what an effective cloud platform should be.

Gaps and Lapses After solving the first problem, the scope of the second problem became clear. Once you can comprehensively embrace the entire data paradigm, the quality of data you are embracing becomes apparent. The ability to see an integrated and consolidated view of data revealed gaps in firms’ data sources that had been masked or neglected by Excel bridges patching together the legacy apps. InvestCloud’s solution for this problem was to develop a Common Interface Compliance (CIC) standard against which a firm’s data could be scored. InvestCloud’s CIC standard comprehensively covers the broadest set of security and transaction types available. From international equities and fixed income, to futures and derivatives, mapping to the CIC is the gold standard for data-source maturity. By grading a firm’s data quality and consistency as well as grading the maturity of the business processes used to supporting things like pricing and reconciliation, we are able to let a firm know which gaps need to be closed before they will be able to fully leverage InvestCloud’s cloud platform.

A 1000 Points of Light The third problem we set out to solve was the expense and inefficiency of report design and implementation. Any firm that needed something outside of the boxed set of reports that came with their application was faced with a long time process of implementation and programming expenses. What would happen if we could radically reengineer the process of creating report views? What if we could replace 6-9 month programming cycles that often failed to deliver what the client was looking for with something more responsive and reliable? And what if could it could be fast and efficient enough that firm’s could inexpensively tailor report views to specific product and demographics. With these thoughts in mind, InvestCloud created Programs Writing Programs (PWP® ). PWP is such a powerful tool that any business analyst can do what the team of programmers would have required weeks or months to do, within a couple of days. With the easier access to over thousands of varied report views now, InvestCloud’s clients have validated that firms do find added value in customizing reports to unique workflows and alternative constituencies.

In our next post, InvestCloud will continue on this track with a discussion of the creative ways clients are using the InvestCloud platform to rethink their reporting options. If you would like to find out more about InvestCloud’s unique, applet based true-cloud platform, visit us at www.investcloud.com to request a demo.

John Wise is a founding partner and CEO of InvestCloud, and is a serial entrepreneur. In his role, John is focused on product design and promotion of the world's first investment platform in the cloud.