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Outdated systems and fragmented processes are creating Data challenges that are becoming a ‘constant operational hurdle’ for Private Credit firms.
Speaking to Alternative Credit Investor, Sarva Srinivasan, Global Head of Strategy and Managing Director for the Americas at Financial Software Company NeoXam, said that with Private Credit growing at a rapid pace, “accurate, timely” Data Reconciliation is becoming increasingly difficult.
“Unlike traditional Assets, the Data underpinning Private Credit instruments are non-standard and highly fragmented, ranging from bespoke loan agreements to irregular cash flows. This makes accurate, timely Reconciliation far more difficult,” he said.
“Many firms are still working with a mix of legacy systems and outsourced processes that simply aren’t built to handle this level of Data complexity, leading to delays, inaccuracies, and rising operational risk.”
He said that the Private Credit Market needs a “shift towards a more integrated, future-proof technology stack”, with a single system that can handle everything from Data ingestion, to Reconciliation, to end-to-end Data processing becoming a necessity.
“Firms that invest in modern, flexible Data architecture will be best positioned to scale efficiently, control risk, and ultimately outperform,” he said.
“The Private Credit Market isn’t going away — but with the right foundation in place, the data challenges it brings become something firms can manage confidently, rather than a constant operational hurdle.”
It comes as a report by KPMG recently found that the rapid growth in the Private Credit Market has led to a “fragmented technological landscape”, which is causing operational challenges for Private Credit firms.
The Big Four auditor said it is “essential” for Private Credit firms to select solutions that prioritise integrations and offer the flexibility to connect with other systems.
