If fund administrators were flowers, then data would be the sun—giving them light, life, beauty, and purpose. That being said, many fund administration teams are still grappling with manual data extraction processes; they’re flowers under a lightbulb. I’m not a florist but I’m not sure that’s very efficient. 

Let’s explore the specific challenges fund administration teams face with manual data extraction and why it’s time to bring automation options into the sunlight.

9 Biggest Challenges of Manual Data Extraction in Fund Administration

1. Labor-Intensive Processes

Manual data extraction in fund administration is as tedious as cutting grass with a pair of scissors. Fund admin teams often find themselves buried under a mountain of paperwork–think investment reports, performance statements, and regulatory filings that pile up like autumn leaves. This labor-intensive process can slow down critical tasks like portfolio reporting and reconciliation, making deadlines loom larger than a skyscraper. 

2. High Error Rates

When it comes to doing anything manually, there’s always the risk of human error popping up like weeds in your garden–difficult to spot and harder to fix. A simple typo can throw off fund valuations or performance reports, leading to discrepancies that can make your head spin. In a field like fund admin, where accuracy is crucial, relying on manual methods can even start to feel a little irresponsible. 

3. Fragmented Data Sources

Data fragmentation in fund administration is as irritating as having a jigsaw puzzle with a handful of the pieces missing. Information is often scattered across various formats–spreadsheets, PDFs, legacy systems, etc.–creating data siloes that make it near impossible to compile cohesive reports. When your data is all over the place, so are you; then valuable insights start slipping through the cracks. 

4. Regulatory Compliance Risks

Fund administration operates under a microscope of regulatory scrutiny, making compliance an essential priority. Manual data extraction increases the risk of non-compliance faster than you can say “SEC filing.” Missed deadlines or inaccuracies can lead to penalties and fines, leaving teams scrambling to keep their heads above the water. 

5. Limited Scalability

As the number of funds under administration grows, manual processes can feel like trying to fit a square peg into a round hole. This lack of scalability can hinder teams from efficiently onboarding new clients or expanding service offerings, ultimately limiting growth potential. When the workload increases, outdated processes can slow you down to a halt.

6. Resource Drain

Manual data extraction is a resource hog, draining time and energy like a black hole. Employees diverge from strategic tasks like risk management and client engagement, leading to burnout and frustration. Nobody wants to feel like a hamster on a wheel, running with all that effort but getting nowhere, all while critical tasks pile up. 

7. Inconsistent Data Quality

Inconsistency in manual data extraction can be like trying to bake a cake with only half the recipe and a table full of too many ingredients. The process can lead to confusion and errors without a clear and complete approach. Different team members may interpret requirements variably, resulting in unreliable data that is impossible to trust. When stakeholders can’t rely on data, it hampers their ability to make informed decisions.

8. Challenges in Performance Analysis

Analyzing fund performance is critical, but manual data extraction can complicate this process significantly. It’s like trying to read a book in a noisy café—distracting and ineffective. Teams often struggle to track performance against benchmarks, making it tough to pivot strategies based on insights. Timely analysis is essential; manual methods can slow progress and hinder decision-making.

9. Integration Difficulties

Finally, manually collected data often struggles to integrate with existing fund administration systems or analytics tools–like oil and water. This lack of integration creates further inefficiencies, forcing teams to spend more time validating and reconciling data instead of leveraging it for strategic insights.

The Path Forward

Fund administration teams should consider transitioning to automated data extraction solutions to tackle these challenges. Embracing technology can significantly enhance operational efficiency, improve data accuracy, and ensure compliance with regulatory requirements.

If you’re looking to elevate your processes and focus on strategic initiatives that deliver real value to your clients, intelligent automation is key. Discover how it can transform your operations by downloading our ebook, 'The Future of Audit is Intelligent Automation.'