In this age of onerous regulatory rules, growing client expectations, complex instruments and volatile markets, effective data management and delivery has become critical to investment management firms’ success. Yet it’s an area where most organizations struggle.
Many are hobbled by fragmented, legacy infrastructures, often sourcing data from a disparate array of direct vendor feeds and legacy data services providers – as Forrester Consulting discovered in a recent Total Economic Impact (TEI) study to assess how enterprises could benefit from deploying the RIMES Managed Data Service (MDS).
Before implementing MDS, the investment managers that participated in the Forrester study wrestled with a number of common issues:
- Data timeliness: Feeding teams with quality data when they need it is a common challenge. As one respondent noted: “The time-to-market wasn’t an issue with the index data request, but it was more so when the market closed every night — the time when the originators made the data available and the time we were getting it.”
- Data quality and accuracy: Respondents complained of the inconsistent and disparate ways index benchmark data was delivered and handled. Data inaccuracies meant performance analysts and data operations teams had to spend significant time on data validation and remediation.
- Inefficiencies: Data management, performance and IT teams had to devote time and effort to data feed and data delivery maintenance, benchmark data vendor management and data scrubbing. This reduces productivity, increases costs, limits scalability and distracts staff from higher-value core competencies.
- Risk management: Poor data quality, inconsistency and timeliness increase risk. Meanwhile, juggling multiple data sources – rather than having a centralized, single source – makes it harder to respond to data vendor changes, anomalies and delivery failures, and mitigate risks.
- Missed business opportunities: “Clients are coming up with more sophisticated requests, and as we roll out new segments of products, we need the underlying data necessary to support those,” noted one respondent, a vice president at one investment management firm.
Adding new indices, and implementing custom benchmarks and blended indices, was often time-consuming, error-prone and expensive. But without the data, firms cannot move into different markets, support new product offerings or meet client demands.
New World Order
Forrester’s study found though that by implementing RIMES MDS, the investment managers benefited from:
- Improved data quality and accuracy.
- Increased operational efficiency, leading to productivity and resource savings.
- Accelerated data timeliness for key processes.
- Improved scalability and ability to explore additional product offerings.
- Reduced third-party service provider costs.
- Increased agility and responsiveness to end clients.
- Better risk management and governance.
- Greater access to expertise, especially for customized benchmarks and cross-family blended indices.
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