The ‘full-service’ model is, in theory, a compelling idea. With one platform ruling over the back- middle- and front-office, financial firms benefit from seamless data aggregation, accelerated investment workflows and enhanced compliance tools. In this single platform utopia, people, data and technology connect in real-time to enable a faster and more effective approach to investment management. And given the market consolidation taking place, it seems like an approach that may well have found its time.
However, as with most things that sound too good to be true there are a number of important caveats that are often overlooked in discussions around the full-service model. The first is perhaps not that surprising: integration on this scale takes time…a lot of time. So, if you do decide to go down the full-service path, then settle in for the long-haul and maybe look to other data services to recognize earlier business benefits.
What’s more, during the integration firms often realize that not all their data requirements can be met using the data sets provided within the platform. This is for the simple reason that investment management is a highly dynamic sector and there are multiple answers to any one question. It is also true that the platform selection is often carried out by investment and risk teams, and only later in the project are the data requirements for areas such as regulatory reporting and performance calculations fully understood. The full-service model presupposes a one-size-fits-all industry – which investment management is obviously not. So, while full-service approaches are great at covering common investment management strategies, the more valuable investment decisions that differentiate firms are not so easily supported. These are typically strategies that are data hungry, use ‘alternative’ data sets and require timely delivery to specialist systems. For all these reasons firms often find that they still need to source and manage data from many sources other than the front to back platform.
The full-service model is therefore great in theory but can only ever be one part of a firm’s data strategy. Andrew Barnett, global head of product strategy at RIMES, says: “what we’re increasingly seeing here at RIMES is that firms find the integrations of full-service models are taking too long, or that they are not fit for all of their strategic investment approaches, and so are turning to us because they don’t want to deploy additional technology solutions and people to fill these gaps. The customized data services RIMES has built its business around is perfectly suited to the timely, bespoke requirements of investment managers looking to differentiate. So, if you’re considering full-service approaches, bear in mind that you will still need specialist data management services to successfully effect your ‘full-service’ model”.
RIMES Managed Data Services is a proven data operating platform that helps firms of all sizes and in all regions align their data consumption & management closely to their business needs. Contact us to learn more.
The content provided in these articles is intended solely for general information purposes, and is provided with the understanding that the authors and publishers are not herein engaged in rendering regulatory or other professional advice or services. Consequently, any use of this information should be done only in consultation with qualified legal counsel. The information in these articles was posted with reasonable care and attention. However, it is possible that some information in these articles is incomplete, incorrect, or inapplicable to particular circumstances or conditions. We do not accept liability for direct or indirect losses resulting from using, relying or acting upon information in these articles.
- Financial Sector Regulations in Australia: The Aussie Rules are Tightening Up
- Panel Discussion: The New Normal
- Consolidation in Australia’s Superannuation Funds Market: Data Quality Comes to the Fore
- Benchmarks Regulation White Paper Update
- RIMES awarded Best Ops Data Management Solution for the fifth time