Reliable data is hard to come by. Reconciling data from a variety of different, often siloed, sources makes it difficult to trust the information.
Modern businesses need solid data to support smart, fast, strategic business decisions. But accounting and investment professionals physically can’t work quickly enough to audit and verify the masses of data the modern world generates on a daily basis.
Technology is here to help. Read on to discover the role investment accounting and reporting software from Fintech innovators can play in establishing trustworthy investment data.
The Problem with Handling Data Manually
Inconsistent, Siloed Data
Data is available from multiple sources – from fund managers and accountants to third parties. Handling all this data is a slow process that is wide open to potential human error. Even after it’s collected, information needs to be painstakingly reconciled.
Data can be left stranded in a particular application – effectively siloed in one department. Separate spreadsheets that make it hard to share data across the business are a particular problem.
All these issues lead to data that is out of date, inconsistent and unreliable.
When stuck using outdated and time-consuming tech like basic spreadsheets, it can be difficult to get on with your actual job. A problem that is only exacerbated when work is outsourced.
Externally booked debits and credits can lack detailed audit trails that internal accountants can follow. And third parties may not know the correct format for data. When data isn’t readily available, or proves difficult to reconcile, it gets frustrating for businesses.
Accountants would much rather engage in productive work than spend hours manually inputting data.
Fintech software can automate routine tasks – delivering state-of-the-art solutions to gather, analyse and disseminate data where it’s needed.
The Role of Fintech Software in Establishing Trustworthy Investment Data
To ensure trustworthy information, modern investment accounting and reporting software can index data. By analysing key indicators, algorithms can assign collected data a confidence rating.
By harnessing the power of technology, today’s accountants have more control, more efficiency, and more confidence in the trustworthiness of their data. Leaving them more time to deliver value to their clients.
The Importance of Trustworthy Data
Companies wishing to analyse and make use of customer data need high levels of trust in their data sets, and a robust data governance framework. In other words, any data analytics programme will need to be trustworthy in two ways:
- The source data – and any analysis performed on it – needs to be reliable.
- Customer data needs to be protected.
Successful companies will partner with trusted fintech providers to deliver consistent, reliable insights while also carefully protecting data.
Big Data Investment
If you’re not familiar with the term, big data refers to massive sets of information that most data processing software can’t support. As internet usage grows exponentially, digital servers collect more data points, increasing a wide range of insights.
But how might big data and its growing prevalence benefit your business? Well, big data insights in accounting and finance allow you to make impactful business decisions and back approaches with concrete evidence. In fact, one of the four defining factors of big data is ‘Veracity’ – or how trustworthy and verifiable the data is.
The remaining three are ‘Velocity’ (how quickly new data is created), ‘Variety’ (the different sources information is collected from), and ‘Volume’ (the amount of data).
Accountants can use data analytics to discern patterns in customer spending, identify market behaviours, anticipate trends and predict regulatory reactions.
Data-backed technologies are essential to predicting and adapting to industry developments. A study from Accenture found that 89% of people surveyed believe that big data will impact business, much like the internet has.
Big data has clear value. But collecting, storing, or purchasing big data may require a significant investment. So think about how much money you can invest in this approach.
Read more about How Accountants Can Use Big Data.
Investments and Fair Value Accounting
An area where big data can have a big impact is fair value accounting.
Fair value accounting is the best, or fairest, way to measure the actual value of an asset. It uses current market values as the basis for recognising certain assets and liabilities. The ‘fair value’ is the estimated price for which an asset can be sold or a liability settled in an orderly transaction to a third party under current market conditions.
Fair value measurement is important, but often difficult. Some companies commit hundreds of employees and specialists to providing data for fair value estimates.
But Fintech data service companies are now able to collect and evaluate data – verifying its trustworthiness and removing the risk of subjective assumptions from fair value estimates.
For instance, Thomson Reuters Valuation Navigator provides market data for valuation by collating it in a searchable repository. This automates daily pricing and valuation workflows, potentially saving many long hours of manual work.
Do More Business With INAA
We are an international accounting association of independent firms, established over 25 years ago to help accountants and auditors expand their business around the globe.
Offering services including IT consulting, our 140 members in 50 countries are dedicated to the delivery of professional accountancy, taxation and related services to our clients around the world.
Discover the benefits of joining our international accounting association.