This article was first published by Funds Europe in October 2021, featuring Christelle Ybanez, Head of Asset Owners & Managers strategy, BNP Paribas Securities Services and Craig Bell, Head of Data Services, BNP Paribas Securities Services.
BNP Paribas Securities Services brings together data from a wide variety of sources to serve hundreds of asset manager and asset owner clients. To do this successfully requires innovation and collaboration.
Almost everything in the asset management industry comes down to data.
Whether it is informed decision-making, monitoring day-to-day fund flows or facilitating the sharing of Environmental, Social and Governance (ESG) information, the accessibility and quality of data is crucial to the successful operations of asset managers and asset owners.
At BNP Paribas Securities Services, we are charged with helping our institutional clients consume, manage, enrich and ultimately derive value from an increasing plethora of data sources. Irrespective of the service being outsourced, clients are demanding access to their processed ‘post-trade data’ in a more timely and agile manner.
The rise of ESG-themed investing has proven to be a major driver of demand for new types of data, related to subjects such as greenhouse-gas emissions, workforce diversity, and the gender pay gap. National and international regulations such as the Task Force on Climate-related Financial Disclosures have raised the bar for corporate reporting on environmental issues.
As the demand for efficient data processing has increased, the financial sector has matched this with technological advances and innovations to meet the challenges.
There is no one magic answer or single technology solution that addresses all data challenges. Instead, technology providers, asset servicers, managers, and institutional clients must work together to influence the way in which data is sourced, managed, and consumed to ensure it is fit for purpose.
At BNP Paribas Securities Services, we help clients that want to gain flexibility over their strategy access information in a cost-effective way. Clients can leverage a network of global expertise and economies of scale from one of the world’s biggest fund services providers.
We believe the latest investments in technology should allow institutional investors to make ever more effective, responsible investment decisions based not only on the full range of (structured) market data sets available today but also the latest and more complex data sets often available only in unstructured formats.
To do this effectively, providers cannot work alone. We work on an open architecture basis to allow clients to make use of other service providers as needed to maintain their bespoke approaches.
This also means a major part of BNP Paribas Securities Services’ client offering is as a ‘connector’: linking clients with data sources and other external providers.
Managing ESG data with Manaos
BNP Paribas Securities Services’ Manaos platform provides a swift and easy-to-use connection between investors, asset managers, and a panel of carefully selected financial and regulation technology specialist companies.
First, Manaos offers a built-in interface between asset owners and their asset managers to facilitate fund inventory collection and data standardisation and allow accurate look-through on their portfolios, at asset level.
Manaos then operates as a connector for external providers. Think of it like the App Store: clients can test and select from a wide range of sustainable finance providers, fintechs, and other service offerings all in one place. This allows investors to assess the ESG qualities and impacts of their portfolios through services provided by a panel of innovative companies readily available on the platform.
We have enhanced Manaos’ capabilities this year through a partnership with Clarity AI, Util, Vigeo Eiris (part of Moody’s ESG Solutions) and S&P Global Trucost. For Manaos users, this means they can instantly assess over 30 apps covering top-trending sustainability topics.
In addition to classical negative screening, ESG and United Nations’ Sustainable Development Goals analysis, investors can get in-depth understanding of E, S and G-related risks and impacts and regulatory applications crossing multiple methodologies (energy transition, alignment to the Paris agreements, physical risks, Sustainable Finance Disclosure Regulation, EU Taxonomy etc). Manaos’ expanding data coverage covers most use cases for product development, reporting and compliance teams at a global scale.
Aggregation and standardisation
As well as collaborator and connector, at BNP Paribas Securities Services we aim to be an aggregator and curator of data through a managed data service comprising data normalisation, aggregation, certification, and enrichment across any source.
We also pay special attention to the ‘hygiene’ factor with data quality being an integral function as part of our managed services ensuring minimal disruption for clients, alongside keeping data and information safe so that security is never compromised.
Clients are increasingly diversifying across asset classes, which gives rise to a new data challenge. Whether listed or unlisted, investors are seeking daily positional summaries and consolidated exposure reporting across their aggregated books of business, a challenge made even greater when the underlying administration lies with a number of different third parties.
At BNP Paribas Securities Services, we manage the complexities of cleansing, standardising and aggregating data, and we address the costly and difficult tasks related to advanced data management solutions. This helps our clients to focus on their core investment management activities by benefiting from advances in data service solutions.
Standardisation also helps investors navigate the changing landscape of ESG investing. ESG is a broad and often complex subject with definitions and standards varying between jurisdictions and providers. This means information and data-gathering has to be of the highest standard possible, with top-quality governance processes around each of the steps.
The end product
Reporting all this data back to clients is arguably the most important aspect. Clients have different reporting and data needs according to their investment portfolios, jurisdictions, and governance structures. In addition, asset manager and asset owner clients have an increasing demand for different types of reporting to support their statutory obligations alongside decision-making, risk management, performance tracking, and operational oversight
Data visualisation tools are increasingly popular, for example, as they can make often complex or dense data sets more easily digestible and enable clients to drill down through levels of data to achieve the granularity they need.
As the speed, volume and variety of data and data sources continue to develop, financial institutions require constant innovation and collaboration between technology and service providers to ensure they can provide the best possible experience to their end clients.
It all comes back to data: how you source it, secure it, refine it, present it, and act upon it? Clients need to make sure they partner with a service provider that can do all this – and much more – to get and stay ahead of the competition.
Article initially published by Funds Europe Sponsored feature: It’s time to unlock your data (funds-europe.com)