Like it or not, we are living in the age of audits and regulatory examinations. From internal teams that scrutinize our processes to regulatory bodies like FINRA and the SEC that scour over client data. The financial services industry has endured these necessary headaches for years, and until recently, they would only impact our businesses a couple times a year. Unfortunately, those days are behind us. We are now in a period where continual audits are the norm, and financial services organizations need to be flexible and quick to react to ever-changing regulatory requirements.

Recently, while one of our clients underwent an internal audit, they were asked the question, “How do you know your asset aggregation process is correctly aggregating customer account balances?” Our client’s answer, manually spot check account balances against the original data source. With hundreds of thousands of records processed per day, how could they know with confidence that the data being fed into their system of record was correct?

When our client came to us and asked the same question, our answer to the problem was to create an independent, light-weight validation solution. Working with industry partner the DTCC, we created a system that autonomously validates the balance information entering Pandia, our books and records application. We’ve been working with the DTCC’s PVF and PFF files for 15 years and many processes are dependent on it. Creating an independent tool to audit our existing processes was the logical evolution of our system.

The data validation tool is designed to take advantage of the latest technology available. It is both flexible and extendable, able to process file types from any source and independently validate against any books and records system. APIs provide access into and out of the data validation tool, and encrypted communication keeps all of the data secure. We currently validate DTCC and Pershing Subscribe position information against aggregation import processes. With the extensibility of our system, we will continue to add additional feed sources and data formats to this list.

Since the inception a year ago, we have processed 21 million accounts. For one of our clients, we validate over 9 million records monthly and have identified 55 issues to date. Issues typically arise from the data being provided by the carriers. The two most common issues have been how carriers provide sub account values and how fund exchanges are provided in the data feeds. In all of these instances we have worked with the carriers to identify and correct any discrepancies in customer account information. Identifying and correcting these discrepancies is one more way of proactively maintaining accurate and trusted data.

From our experience we know that this sort of scrutiny dealt to one firm will not be an isolated event. Our goal is to ensure that all our clients are prepared. We continually upgrade our trade surveillance and compliance solutions to ensure our clients remain compliant with the financial industry’s rules and regulations. From AML to Reg BI compliance, we are there to make sure regulatory requirements are met. Learn more about our regulatory technology solutions here. 


Total Accounts Processed

Records Processed Each Month

Issues Identified

FINRA Audit Guide
Share This