For institutional investors wrestling with a more complex, multi-asset world, data is an increasingly strategic focus, according to the recent article How Institutional Investors’ Use of Big Data Needs to Evolve, by Lou Maiuri, head of State Street Global Exchange and Global Markets, and Ivan Matviak, head of State Street Global Exchange for North America, Institutional Investor.
But while the majority of institutional investors recognize the need for data dexterity, say the State Street authors, achieving it can be a daunting task. Aggregating data from multiple sources and platforms, increasingly complicated asset classes, rapidly-evolving technologies and the burden of legacy infrastructures all create challenges in the data management process.
To overcome these challenges, there are four steps investors need to consider, note the authors:
Acquisition – How can firms capture a complex, distinct and continually changing set of data sources, and create an interoperable environment?
Data governance – Do they have the right talent?
Modeling – Can firms operate and manipulate inflexible data models, while bringing evolving technologies on board?
Consumption – How will constantly changing data uses exacerbate overall data management challenges?
To increase data dexterity, and become what State Street calls “data innovators” (firms that “treat data as a top strategic priority and thus are able to adapt faster to new business needs”), institutional investors should:
- Start small and drive change incrementally, such as by breaking down existing data silos, creating effective risk analytics and complying with regulatory standards.
- Determine how to handle data governance, using tools and processes to normalize and aggregate data flows. At this stage, say the State Street authors, organizations should decide if data will be managed in-house or by partnering with a third party.
- Foster cross-organizational support and involvement – spanning technology departments, business operations and front-office teams – and ensure buy-in from senior executives, since improving data management often involves large-scale changes.
A helping hand
There is no simple, all-encompassing “data dexterity” fix. But a dedicated managed data service that can collate diverse data from a growing number of originators, and automate delivery of consistent, accurate and timely multi-asset class information across the enterprise can go a long way to addressing investors’ evolving needs. And by combining sophisticated data management with a robust data governance infrastructure, a managed data service can ensure investors gain more control over and insight into their data flows and usage.