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Using Better Client Data Management Practices to Improve Risk and the Client Experience

6/11/20 5:15 PM

Digitize the business. Improve risk management. Understand what clients need and want. That's the start of a great wish list for those working in data management. Is it attainable? 

In a recent webinar, "The Benefits of Advancing Client Data Management Capabilities," panelists from JP Morgan, DTCC and Kingland highlighted areas that can help firms improve their client data management capabilities and check off the wish list above.

Real Improvements to the Client Experience
The customer experience is important. According to Esteban Kolsky, 72% of customers will share a positive experience with six or more people. And 13% will share their experience with 15 or more. If you have the ability to quickly and easily respond to an inquiry, approve transactions, and manage exposure to a client, you're better able to meet client needs. If you want to maneuver and communicate between databases or communicate with external vendors - all in the hopes of improving the client experience - client data should become foundational to everything you do.

By making it foundational, you have their records at hand and all those records have the information you need to know about your client, making processes that much more efficient. Think of it this way ... If you can improve client service and the customer experience, there's an opportunity to get 15-20% revenue gain within three years. But, you have to get your data house in order.

Maintaining Stability During Volatility
In volatile markets, risk management can be at play for firms. The information about clearing members, for example, is critical to evaluating their credit need and in calculating - with precision - the risk of their unsettled portfolio transactions. In this example, firms may want to know the risk represented to central counterparties, to the industry and members. Having accurate client data helps during any trading day, but can be extremely critical in volatile markets, similar to the more than 360 million market-side trades that occurred earlier this year.

Overcoming Challenges
The goal is to be able to tie together everything you know about your clients. Big tech firms get this. Apple, Microsoft. Amazon. Facebook. They're monetizing their information to millions and millions of subscribers. 

To do this, it starts with quality and well-sourced data. We find that investing in technologies such as graph database and cloud optimization allows firms to best store and manage hierarchical data. Doing so gives clients the ability to talk about and manage the relationships among hierarchies and provide analytics on the relationships between different data nodes within the hierarchy.

With everything ever-evolving - data, requirements, risk management - having the flexibility within your client data management discipline can help you stay ahead of and adjust to the changes as requirements move.

If you can expand your data management practices to the enterprise, you gain more control and experience less risk of client data being misunderstood by different business units or organizations. If you're able to do this correctly, you lower your cost of ownership. Reconciliation processes are decommissioned. Multiple stores disappear. There's less transformation of data. And you have fewer points to implement data quality and operational data quality controls.

Where do you start or what is an important piece to review if you're already deep in the trenches of client data management? Ensure you think about data management in the context of client service, having the ability to easily traverse and understand data about your clients (e.g., who they are, what they do, where they are and who they might do business with).

Watch the webinar to hear panelists expand on this information and share how you can get a holistic view of your client data.

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