2016 Outlook: Data Management Will Be a Buy-Side Priority

With the New Year comes the time for resolutions. So if it’s not on the list already, here is a recommendation: devote attention to your firm’s data management and governance capabilities.

For forward-thinking investment managers, data management is increasingly a C-level priority – and the trend will become even more pronounced as we go through 2016. The reason is simple: growing client and regulatory pressure for fingertip access to accurate and auditable datasets to meet enhanced transparency, risk management and service requirements.

It all comes back to data

These demands are affecting every segment of the industry. For instance, Accenture notes that: “In the institutional market, request for proposal (RFP) processes have become more demanding, including greater focus on risk management and regulatory compliance.”

Yet it is an area where many asset managers struggle. A recent survey by Forbes Insights, in association with EY and SEI, found nearly three-quarters of firms “say that regulatory compliance and reporting is a significant challenge for their product and service lines.”

At the same time, both the Accenture and Forbes studies highlight the need for asset managers to improve their operating models and cost structures in the face of industry fee and margin pressures.

Squaring this circle – of ensuring regulatory compliance and high quality service at lower cost – is nigh on impossible though as long as firms remain hobbled by inefficient data infrastructures and processes. Instead, asset managers need to adopt a new approach to data management if they are to achieve the advances in data quality, transparency, scalability and cost efficiency that today’s environment demands.

Benefits of a managed data service

In-house data management programs that seek to uncover and strip out redundant vendor data feeds, legacy solutions and inefficient processes, and improve data accuracy, timeliness and distribution are an option. But such projects require specialized skills and considerable investment.

The alternative is a managed data service. Not only can a dedicated third-party service ease the data management burden, but it can deliver a range of economic and strategic benefits, including:

  • Reduced total cost of ownership through savings on legacy vendor fees, data delivery efficiency and productivity gains.
  • Closer alignment between data consumption and business usage.
  • Improved data quality and service levels for business functions across the enterprise.
  • Enhanced risk management and risk mitigation.
  • Better performance analysis and reporting.
  • Greater scalability, minimizing the need for additional headcount.
  • Faster time-to-market, resulting in enhanced front-office productivity and business agility.

Effective data management is becoming ever more critical to firms’ future success. Make sure you don’t get left behind.

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