With all this in mind, here are a few considerations to chew on when contemplating account aggregation solution providers:
Asset coverage: Do they have their own Security Master?
Data cleansing: What steps do they take to ensure “clean” data? For example, do they check that quantity x price = market value?
Transactions: Do they “normalize” transaction types (so that one custodian’s “BUY” order and another’s “PUR” order are the same)? Do they have a process to account for missing transactions and, if so, what happens if they are “found” days later? Do they assign dividend payments to a specific security and, if so, how?
Proof: How do they know their data is clean? Do they “eat their own cooking” or rely on their customers to bring issues to their attention?
Custodians: What relationships do they have with key custodians? Do they work with them to resolve issues or are the custodians looked upon as a third wheel?
Responsiveness: How responsive are they to adding financial institutions, to data quality issues, to outages, etc.?
Data aggregation is a difficult and sometimes ugly business. It’s exciting that there’s so much recent activity in the space, and I expect the technology to only improve over time.
David Rossien is a financial technology consultant and served as a product visionary and market strategist for BloombergBlack, which was successfully launched in April of 2013 and shuttered in August of that year.