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Client demand for custom benchmarks to increase data costs for asset managers, according to Deloitte and RIMES

Asset managers expect the cost of benchmark and index data to rise due to demand from their clients for strategies that require custom benchmarks, according to both Deloitte and RIMES, a leader in benchmark data management.

In a new Deloitte survey of 13 major asset managers, 90% of respondents stated that they anticipated an increased need for customised or blended benchmarks as clients’ needs become more and more specific.

Similarly, in a recent RIMES survey of over 50 major asset managers, 80% of respondents stated that they believed demand for custom benchmarks would increase during 2013, and 82% expected this to increase their data costs in 2013.

The Deloitte study, “Benchmark/index data management and related costs”, reveals that managing data is one of the main challenges faced by asset managers today. Key findings include:

  • Asset managers are keen to rationalise data sources and number of benchmarks.
  • The number of full time staff working on benchmark/index data is positively correlated to the number of data sources.
  • 42% of participants do not monitor or control the use of data – stronger controls are required in order to minimise costs.
  • Over half of the time dedicated to data processing is concentrated on validation and transformation
  • Some participants are considering outsourcing the validation and the transformation of data to an integrator specialised in benchmark/index data

Christian Fauvelais, Chief Executive Officer and co-Founder of RIMES, comments: “It is essential that asset managers respond to customer demand if they are to stay ahead in this competitive environment, and so consumption of custom benchmark data looks set to continue to accelerate in the coming years as product innovation levels increase. As a result, buy-side demand for technology that gives them the custom data they need, when they need it, validated and in a format that is ready for use is on the up.”

“We have the expertise and technology to respond to any request for custom databases, whether a small change or a complete recalculation. To put this into context, we have just built a custom module for over 60,000 data entities, with around 12,000 items per entity and 15 years of history.”

Omar Safi, Director Financial Services Industries at Deloitte in France comments: “Financial data is not only an IT or back-office matter but also a corporate governance issue, requiring global vision. Only a broad corporate outlook will help achieve cost reduction, overall risk reduction, bring coherence in financial and managerial decisions and improve the quality of service.”

 

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