Data Governance Remains Out of Reach Despite Growing Pressures on Asset Managers

RIMES releases fourth Annual Buy-Side Survey

  • Ever-complex investment strategies combined with relentless regulation present asset managers with daunting data management challenge
  • 60 percent admit data governance remains a work in progress
  • Improvement to data quality and data governance top priorities for asset managers

Growing diversity in investment strategies and intense regulation are forcing asset managers to take a new approach to data management and data governance, according to the fourth Annual Buy-Side Survey from RIMES, the leading provider of managed data services for the buy-side.

The RIMES Survey reveals that more firms are now prioritizing data governance in their organization (63 percent in 2016 versus 58 percent last year). Complexity wrought by increasing investment activity in non-traditional assets and markets coupled with a growing body of legislation are leading firms to increase their focus on good data governance.

In spite of this focus, more than half of asset management firms admit that data governance remains a work in progress (60%), with a further 23 percent stating their data governance is only emergent.

With ever-complex data requirements, the RIMES Survey finds that 80 percent of asset managers acknowledge efficiency is a leading benefit of best practice data governance, closely followed by 77 percent citing data quality. In fact, two thirds of asset managers (66%) consider data quality improvement their primary data management priority in 2016.

The sophistication of data governance varies significantly, with just 17 percent stating their approach is at a mature level. Larger firms (those that manage assets worth over $50 billion) are more focused on improving their data governance than smaller firms. Among larger firms, 74 percent say that improvements to their data governance is a main priority in 2016, compared with 45 percent of smaller firms.

Alessandro Ferrari, EVP Global Marketing, RIMES, comments: “86 percent of asset management firms now formally identify and qualify the benefits of their data management strategy, demonstrating that data management and governance are moving up the business agenda. However, a lot of firms regard good data governance as an ongoing journey rather than a destination and therefore they are yet to achieve the full quality, efficiency and compliance benefits that they know data governance can deliver.”

The RIMES Survey also uncovers that over half of the respondents reporting data governance as mature are in the insurance sector, indicating that Solvency II has put insurers under increasing scrutiny. Insurers must perform regular, consistent data quality assessments with demonstrable systems and processes in place.

Alessandro Ferrari adds: “In four years’ taking the pulse of the buy-side’s data management needs, we’ve revealed a glacial approach to data governance improvement. With the added pressure to comply with active and incoming regulations, the industry is now starting to put plans into action and get to grips with strong implementation of data governance. I have no doubt that the firms with the most tactical approach to data governance will outperform their less nimble counterparts.”

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