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New guidelines help buyside combat spiralling costs of benchmark data management

  • Investit study highlights cost challenges and defines best practice framework.
  • Findings reveal that over two thirds of investment managers waste money by failing to focus their data spend.
  • Almost a third of investment managers receive data in inconsistent formats and at the wrong time.

A new study by Investit (www.investit.com) commissioned by RIMES Technologies, a leader in index and benchmark data management, has revealed the challenges faced by investment managers in assessing their data management processes and established a best practice framework to help enable them to identify areas for improvement.

When the framework was applied to 18 investment management firms in the US and Europe, it revealed that over two thirds (67%) of investment managers have weak data governance, failing to focus their data spend, and almost a third (28%) of investment managers have weak data processing, receiving data in inconsistent formats and not at the optimal time.

Christian Fauvelais, CEO and co-founder of RIMES, comments: “Managing index data and benchmarks presents significantly different challenges to other data types. Benchmarks are critical to investment management and although they are growing in volume and complexity, there had previously been no way to measure the effectiveness of the processes a company has in place to manage them. We are committed to helping the buyside improve their data governance, tighten control and reduce data management costs. With the publication of this study we have quantified the major challenges and developed practical methods that can benefit the entire industry.”

Catherine Doherty, Founder and CEO of Investit comments: “Investment managers must focus on data governance if they are to align themselves more closely with best practice. This study revealed that even when managers are proficient at controlling the purchase of new index data and benchmarks, they are exposed to the risk that they are processing data that is no longer required by the business. In today’s cost-sensitive operating environment, this risk is unacceptable.”

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