Best-in-class Capital Markets and Finance teams are able to track their KPIs in real time, and to anticipate debt capital needs for their companies well in advance. By contrast, average Capital Markets teams may find themselves double- or triple-checking the accuracy of their debt capital data, and unsure of whether they're improving their company's capital efficiency over time.
In recent interviews, we've explored what separates top Capital Markets teams from the rest: the most successful teams understand what their data is telling them. They know how to aggregate information, surface what’s most important, and then make better, more informed decisions. Often, they're able to do this because they have invested the time and resources to create a high-quality data foundation.
Here’s how to start using your data as a competitive advantage.
Why focus on ensuring clean, accessible data?
Data-based decisions are only valuable if the underlying data is correct. Capital Markets teams thrive on the ability to make quick, well-informed decisions. If your data isn’t clean, you’re dealing with a faulty map.
What's more, you won't be able to monitor KPIs like your effective advance rate, ineligible receivables and excess concentration, and financial covenant compliance.
A key part of what the Capital Markets team at Finley does involves taking a deep dive into how customers currently store and use their data. We look at everything, from loan management systems to operating account data and SPV accounts. By understanding the existing data architecture and usage, as well as the best way to integrate with your systems, we're can tailor our system to enhance the management of credit facilities.
Comprehensive, reliable, and accessible data helps teams mitigate risk, stay compliant with their credit agreement, be more responsive to internal asks (e.g., from Finance or the C-suite), and do more with less (since less manual intervention is needed).
With the right data in place and easy access through a single source of truth like Finley, Capital Markets teams can develop many different dashboards and metrics that provide better analysis, decision-making, and strategy.
Why is this so hard for capital markets teams?
We find that many teams struggle to produce clean, reliable data. When Finance teams struggle to trust their metrics, it's rarely due to a lack of effort. More often, the root cause is the absence of properly established data pipelines or lending tech stacks that are constantly evolving. Well-maintained data pipelines and internal integrations are crucial for accurately collecting, processing, and integrating data from various sources into a coherent, analyzable format.
But setting up robust data pipelines is challenging. The volume and variety of data sources, along with the complexity of financial data and the dynamic nature of the markets require sophisticated integration and processing capabilities.
Financial information often comes in diverse (or incompatible) formats, meaning teams have to manually normalize the data that comes through their systems before it’s usable. Teams often struggle to find the time and resources to audit every system for interoperability, especially when they're bringing on multiple vendors at once (e.g., fraud detection vendors, payment operations vendors, etc.)
How to get clean, well-organized data pipelines
If you want to lay the foundation for more accurate, reliable, and actionable insights, there are several ways to get started. Here are a few best practices.
Make sure your data is accurate. Having the right data is critical for making good decisions. Audit your data sources to spot and correct inaccuracies, and consider implementing automated data validation processes to maintain data integrity from the outset. Try generating a borrowing base programmatically to see if there is any manual remediation required.
Implement a consistent data structure. Create and enforce standard naming conventions across your datasets. Consistency in naming conventions and data models ensures that everyone is speaking the same language, and allows for better integrations with technology. Document and/or lock your loan tape template and make sure it works for all parties involved (e.g., both your Data team and your Capital Provider).
Automate what you can. Reduce manual errors and be more efficient by automating repetitive tasks and updates. It improves accuracy and lets teams focus on more strategic work. Often, this starts with automating funding requests like draws, recycles, and pay-downs.
Create a single source of truth for your team. Make sure everyone is working from the same information. Platforms like Finley’s eliminate discrepancies and misunderstandings that come from using multiple, potentially conflicting data sources. Setting up central Capital Markets dashboards is a great way to ensure accountability and transparency.
Want to learn more about Finley?
Finley is private credit management software that helps private credit borrowers and asset managers streamline and monitor asset-backed loans. From tracking covenants and deliverables, to assembling funding requests and analyzing asset performance, Finley gives borrowers and lenders peace of mind when it comes to debt capital management. For more, check out our Product page.
Interested in learning more about what it’s like to work at Finley? Check out our careers page.
