Effective data management might require organizations to leverage a complex approach, various market experts asserted at a roundtable that happened at the North American Trading Architecture Summit on April 15.
Financial institutions cope with myriad pressures
Buy-side financial institutions might benefit from perusing the statements made by these experts, as a wide range of companies have been encountering challenges in their efforts to make the best possible use of their data. These organizations have been coping with various pressures, including shrinking budgets and rising cost pressures, along with greater demands being placed on their ability to leverage key information.
For example, many asset managers are being pressured to harness more benchmarks when evaluating their performance. While they may have previously only worked with measures of equity market performance such as the S&P 500 Index, many buy-side firms have been using both a far greater range of these benchmarks, and also ones that have been customized.
Regulatory environment intricate and changing
In addition, firms are struggling to comply with a regulatory framework that is both complex and constantly changing. Laura Hamilton, CTO of a major financial institution’s investment banking division, noted that supervisors have been monitoring the data governance frameworks of industry participants closely, according to Buy-Side Technology. She emphasized that many organizations are taking rather sophisticated approaches to ensuring they have the right data policies and procedures.
Doing so might be wise, as amid the current environment, regulators want companies to establish formalized policies and procedures to manage their data. Hamilton’s firm has focused on developing a vocabulary that employees can use for data control.
Having this resource in place could be particularly helpful for buy-side financial institutions, as many of these industry participants have been scrambling to overhaul their current data management practices and infrastructure in an effort to comply with the current regulatory framework.
Over the last several years, lawmakers and government agencies have enacted some major reforms, including Dodd-Frank and European Market Infrastructure Regulation. As a result of these regulatory regimes, buy-side financial institutions have been coping with more stringent requirements for data matters such as reporting.
Amid this situation, buy-side financial institutions might need to use a wide range of tools to cull crucial information from many sources and then combine it into a single data source, according to Buy-Side Technology. Fortunately, Michael Radziemski, chief information officer of a major U.S. investment firm, noted that in the last 15 or so years, companies have created many different applications that IT staff can use to achieve this goal.