During a recent meeting, a prospective client reiterated just how much time they spend every day resolving exceptions. Most of the vendors they met with prior to Electra were touting improvements made to matching rates through machine learning or another technology innovation. This prospect questioned the actual time they would save in the investigation process by increasing match rates for their holdings and transactions data by a few tenths of a percent. Instead, our prospect saw through the buzzwords and noted that the vast majority of their exceptions are true breaks that often require them to leave the reconciliation application to diagnose why the break occurred and what steps are needed for resolution.
Electra is actively engaged in Blockchain research. One of the most basic questions about Blockchain is why there is a need for all of this complicated mathematics and cryptography. When we think of databases as we understand them now, we think of a well-ordered environment where there is a DBA who creates a set of rules and enforces them. The point of the DLT complexity is that if you remove the DBA and any ability to enforce rules then you need a completely distributed system to be able to ensure that rights are carried by the person who is attempting to do a transaction. The cryptographic keys and verification and proofs that are done are the solution to this. It is essentially a new kind of database that can exist in a completely wild environment without enforcement because the complexity of the work needed to add a new transaction if you don’t have the right information is so high that it is undoable. Hence enforcement is done in the math and cost of computing power.
Jimmy Song (https://medium.com/@jimmysong) said it this way, “Blockchains are essentially a distributed database with cryptographic proofs of the right to insert rows.”
Of course, the original target in Bitcoin was to deal with attackers. You can read about it here: http://nakamotoinstitute.org/bitcoin/ .
(Scott Rhodes — Chief Operating Officer)
An Institutional manager client, based in Chicago, called our support team this week asking about how to set up specific payment instructions outside the standard instructions provided with Electra Billing. The need was specific to a group of new accounts that required very specific payment instructions for check and wire payments. We showed the client how to setup unique payment instructions and assign them to specific accounts; all the while ensuring that the remaining accounts continue to receive the standard payment instructions. This capability makes it easy for users of Electra Billing to accommodate special requests from their clients.
(Doug Fritz — Product Manager)
We recently met with a large hedge fund who is looking to replace their reconciliation solution. Their problem is a common one where they have outgrown the capabilities of their current reconciliation platform. At the time when they purchased the tool, the reconciliation requirements were straightforward as they simply needed to reconcile long/short equities between themselves and their prime brokers.
Like many others in the alternative investment management space, our hedge fund prospect has grown their assets by capturing the attention of institutional investors and by expanding their investment strategy to include more esoteric asset classes. After taking in more institutional money, the hedge fund decided to enlist the services of a fund administrator who will help them demonstrate greater transparency. By opening up their trading strategy to include more asset classes, the hedge fund now deals with more internal systems and additional challenges related to reference data being stored across several silos.
Why would adding a fund administrator and additional asset classes cause a problem for their current reconciliation solution? For many of you who have gone down this path, the answer is obvious. Upon introducing an additional reconciliation source (fund administrator) and new internal systems meant to support the trading of esoteric assets, the prospect went from a simple one-to-one reconciliation requirement to needing true N-way reconciliation capabilities like those found in Electra Reconciliation. Their first goal is to perform a three-way reconciliation between their accounting system, prime brokers, and fund administrator. This eliminates configuring and managing two separate reconciliation processes (A to B and A to C) that are littered with redundancy. Their second goal is to reconcile security master information held in their data warehouse (golden record), OMS, accounting system, employee compliance and risk management systems. This assures staff that everyone is using the last security master information which removes unnecessary investigation work related to security identifiers.
Electra Reconciliation takes the pain out of identifying breaks when there are more than two systems. Its innovative, user configurable data dictionary allows our clients to tackle any type of reconciliation data. By eliminating the need to perform several one-to-one reconciliations, they remove redundancy in the reconciliation process, which lowers overall operational costs through a reduction in their cost per transaction. If you are a growing investment manager looking to move away from an inefficient reconciliation process where three or more data sources are being reconciled, we welcome the opportunity to assist you.
(Todd Sloan — Electra Reconciliation, Product Management)
Day over day consistency in data delivery is an important part of choosing a data aggregation and delivery service.
Recently, a custodian from a major bank went through a system migration. The consequence of this migration was that many data points changed and clients using their platform were negatively affected because their feeds no longer matched their internal templates.
By contrast, customers of Electra Data were not affected by the change because our data aggregation is set up with a separate SFTP channel, which is not only secure but unchanging. Electra Data customers are unaffected by events that would normally cause downstream problems during upgrades and maintenance at custodians.
(Tiffany Bula — Electra Data, Account Manager)
A North America base advisor (237 billion AUM) focused on equity & fixed income trading didn’t have an effective way to differentiate between the Shanghai and Shenzen market in China. For each trade, they manually generated and fax specialty trade tickets.
Our help desk assisted the user in fully automating the selection of correct broker instructions in Electra Settlements for both the Shanghai and Shenzen activity based on the exchange code within each market. By incorporating an exchange code into the broker instruction selection logic, we were able to automatically differentiate which broker details to append to the trade instruction.
Once incorporated into their daily workflow, our client was able to free up and reallocate the 40 minutes it took to manually process their Chinese settlement activity to another operational task.
(Brian Prioleau, Manager of Settlement Solutions)
Through the use of Invoice Narratives, Electra Billing provides account level options for displaying custom communications on invoices. Invoice Narratives can be added, removed, or updated on demand as well. Furthermore, clients utilizing the Electra Billing Watcher Service can automate the loading of narratives from other internal systems to provide a flexible and dynamic communication channel for outgoing invoices.
(Doug Fritz — Product Manager)
This is particularly useful when finding offsetting transactions, or when you want to line up the trade values that came with the wrong perspective.
There are two ways you can do it.
- The easiest way is to left-click the column header while holding the [Alt] key. This will toggle Abs() sort on this column.
- You can also use a tickbox in the SmartSearch Column Setup (right-click column header and select Column Setup tab to get there):
Whichever way you set the Absolute sort, it will be saved when the SmartSearch is closed, just like the SmartSearch column layout. Please note that the Absolute sort feature is available in Electra Reconciliation Version 5.6.03 and above.
(Alexander Musayev, Senior Implementation Consultant)
We recently demonstrated our award-winning Electra Reconciliation solution to a current Electra Data+ client to hear their thoughts on our product and how it compares to their current reconciliation process, which includes a commercial reconciliation product, Excel spreadsheets and Microsoft Access databases. During the Electra Reconciliation demonstration, we stopped to highlight our NAV reconciliation capabilities. Today, this client performs the NAV reconciliation in an Excel spreadsheet because their current reconciliation solution lacks support for this important month-end requirement. The client shared details about the many challenges they face when collecting NAV data from their custodians and using Excel to reconcile it. They are manually gathering and populating NAV data within multiple Excel spreadsheet tabs with additional data manipulation necessary to accommodate their hard-coded file layout and custom macros. The client understands that each time someone handles the data manually, they are introducing additional risk to an Excel-based process that is already fragile. With these risks in mind, our client has asked Electra to expand their use of the Electra Data+ service to not only include the cash, transactions and positions data being collected today, but also audited NAV data.
(Todd Sloan, Senior Vice President — Electra Reconciliation)
Electra Information Systems and Linedata have announced the integration of Electra Reconciliation and Linedata Mfact, Linedata’s global fund accounting solution.