Brad Hunt, Rimes CEO - Staying ahead of the new world data tidal wave
November 16, 2022
Rimes CEO, Brad Hunt, provides some insights on staying ahead of the new world data tidal wave.
I recently attended The Summit for Asset Management (TSAM) in New York. Against the current global backdrop of continuing political turmoil and economic uncertainty, the event provided a much-needed public forum for buy-side industry leaders to meet and discuss data management challenges. Following my fireside chat, “How capitalizing on data analytics, research, and investment intelligence may allow for better informed investment decisions” and numerous conversations with delegates and clients, I wanted to share a few observations and recurring themes from the day. A few of which may surprise you!
- Rising data volumes and increased data complexity - Both have been increasing at a rapid rate for several reasons related to access to more open data, new data types and formats and complexity of how assets are being managed, including ESG.
- Legacy technology limitations – Firms are struggling with how to scale and manage a tidal wave of new data– the enterprise will suffer downstream if you don’t solve the upstream data issues first. Coupled with inhouse legacy systems not designed to deal with new use cases and not able to “connect-the-dots” across the front-middle and back office.
- Outsourcing to managed services – Solving for the scalability issue isn’t easy. In my interactions with large asset managers, it is increasingly clear they are struggling to keep up with the current data tidal wave and related complexity, higher TCO and business risk. The need to outsource to those data management partners who can, has never been greater. If the buyside doesn’t address this now, they will be left behind.
- ESG data management - Why is ESG data so challenging? New fragmented, non- standardized ESG data sets continue to confound. The root cause of the challenge is fragmentation. Portfolio managers want to use ESG data as an opportunity to differentiate. They are acutely aware of the challenges with ESG data- with very big gaps in completeness, quality and consistency. This is a ‘real world’ problem - not a data vendor problem.
- Severe skills shortage – Lack of experienced resources and access to intellectual capital who understand investment data nuances and the benefits of new technology.
- Pace of regulatory change– Amidst growing regulatory pressures and the shift to alternative asset classes, the industry must update its technology, skills and methods to bridge the gap between intended outcomes and the reality of managing disparate and incomplete data- the need to get it right- or face the consequences has never been greater.
If none of this seems new, why is the industry still struggling with the same issues that have hampering users for years? I believe a key reason is that investment firms have tried to fix the problems themselves –typically throwing hardware or people at the problem. Not outsourcing the "outsourceable" components, they are now overwhelmed with the volume and complexity of data and cannot focus on the intended client value-add(s) downstream.
There is also a profoundly entrenched obsession with creating golden security masters, often sacrificing quality or delivery timing. Rather than making a perfect 300 field security master, firms need to shift to product and fund masters and provide investment professionals with the data they need. To put it simply, data needs- context, which means you must deliver what is fit for purpose in the right time frame and ensure all the data is fully synthesized for usage across the entire business enterprise.
All that said, good news is that the tides are turning, a shift in attitude probably driven by the massive talent shortage globally. At Rimes, our goal is simple – empower our clients with investment data which is fit for purpose works. I believe now is the time to grasp the moment by outsourcing enterprise data management (EDM) to an expert partner who can help you to connect the dots to combine downstream systems, operational processes, and front-office needs.