Keeping the books in order
For the third instalment of the Onchain Custodian webinar series “Is it time to reconsider crypto”, Tanmai Sharma, CEO of Canopy, walked us through how multi-asset class integrated reporting solutions can help in building a symbiotic relationship between asset portfolio management in traditional financial infrastructure and digital assets management platforms.
Prior to founding Canopy, Tanmai previously worked as a Managing Director at Deutsche Bank, amassing 15 years of experience in New York, Singapore, and Hong Kong. Canopy is a Singapore-based fintech offering account aggregation, portfolio analytics, and client reporting solutions with Credit Suisse both as a client and investor.
The normalisation of digital assets in traditional investment portfolios and a need for integrated reporting tools
As digital assets and cryptocurrencies become available to institutional players, so does the need for investor tools and platforms that can monitor multiple asset classes on corporate balance sheets to correctly track digital assets alongside traditional stores of value. Tanmai shares that his clients are mostly diversified, with a portion allocated into crypto. With this, the nature of client reporting is changing, along with the innovation in data analytics. Just as reporting tools are available in traditional finance, the market for a similar tool for crypto has been in high demand.
The migration of traditional investors into the digital asset space is increasingly common. With more institutions adopting this new asset class, it becomes imperative for family offices and high net-worth individuals to have a platform that can consolidate financial data under one standard reporting and tracking tool.
Challenging traditional financial reporting boundaries
Staying current and compliant in today’s evolving crypto market and regulatory environment requires being updated with one’s financial reporting system. Especially in family offices where each member is diversified, an institutional-grade reporting solution should offer a holistic view of their portfolios and the expectation to consolidate all their data assets in various formats.
As investors delve deeper into alternative asset classes, reporting solutions will need to evolve as the environment in which it operates changes. Tanmai explains, “If you have a family and you have a trust, you have multiple family members who have all sorts of investments like real estate, illiquid investment startups, or cryptos. All these different family members have different holdings and might own different percentages of various assets.”
Tools such as Canopy Cloud can integrate transaction data both in traditional finance and crypto, which allows clients to easily get updates, and help them manage their assets in the most efficient way possible.
Institutions also expect actionable insights and highly customisable reports that should provide a great benefit in analysing data. Canopy Cloud, allows users to generate a high-level summary report and detailed analytics with the click of a button where users can also customise it to display shorter and more frequent time frames, something that many investors are looking for.
“This is actually where crypto shines,” Tanmai said. While real estate data, for instance, might come in as Excel, or a PDF, crypto could come in either as a data feed, API, or PDF and Excel. “The great thing about crypto reporting is that custodians are already tech-savvy and they are able to give us data quite easily, with very little friction. The banks are not quite there yet,” Tanmai remarked.
The future of client reporting
Proper financial reporting systems provide incredible benefits for businesses with regards to their compliance with regulatory obligations, building KYC programs, overall accounting, and monitoring the tax implications of each transaction. If the process is optimised, it can provide superior business and investment insights to meet the existing demands of clients and the industry. As traditional and digital assets begin to coalesce in an investor’s portfolio, a tool that consolidates them both sets up the future for a standardized process of executing financial reports.
In the increasingly diversified portfolio of high net worth individuals and family offices, Tanmai said asset managers must always have a holistic view of the clients’ asset portfolio. “Remind yourself that these are all coming from multiple data sources, all of whom deliver data differently, and at different points in time.” The future of client reporting is transactional, on-time and accurate. As such, verified accounting reports across a multi-asset portfolio is needed so the client feels confident with their investments and more importantly, becomes comfortable with digital assets. After all, tracking crypto is the easier part. With the right reporting tool, monitoring crypto alongside traditional investments will be their best competitive advantage over others who are rapidly getting exposure in both traditional finance and digital assets.
OUTLINE:
00:00 — Introduction
03:36 — The levels of analytics in multi-asset class platform
09:24 — Getting analytical insights at button-click
13:59 — Thinking of crypto as part of your portfolio and seeing a balanced view
18:32 — The critical function of data standardization
24:53 — Fee structure capabilities
33:50 — Making use of the best possible data available
