Operational Data is Key for Successful Offensive Strategies

If a new survey from Alpha FMC is anything to go by, asset managers are facing a significant data skills gap that may hinder their ability to improve returns and cut costs. For the survey, Alpha FMC spoke to 33 asset managers with a combined AUM of £6.9 trillion. Key findings include:

  • Less than 1% of staff at asset managers have data management skills
  • 69% of firms do not have or intend to have a Chief Data Officer
  • 48% of firms say data is siloed by business function

The survey also suggests that larger firms are much more advanced in their data strategies than smaller firms. Whereas 64% of the latter are still hiring data architects – a foundational stage of a data strategy – 45% of larger players are looking to hire data scientists to extract valuable insights from their data.

This split suggests that smaller firms are still getting to grips with defensive data strategies whereas larger players are pursuing offensive data strategies where their data reveals insights for investment strategies.

Andrew Barnett, Global Head of Product Strategy at RIMES, provided some thoughts on the survey: “In common with businesses in other sectors, asset managers are looking for ways to leverage data for value-adding insights. As Alpha FMC’s research shows, this can’t happen without the right skills.

“What makes this more of a challenge is that financial sector regulations and the commercial models of data providers can limit the operational use of data. Data managers are therefore not able to simply create a sandbox of technology and data to innovate. Rather, they must take a rigorous, highly governed approach to data projects, adding costs and latency to the provision of timely data services. This is something that even the most skilled of data leaders will find challenging, especially with the CFO looking over their shoulders.

“When it comes to asset management, you can’t leverage value-adding offensive data capabilities unless you have the defensive operational data in place first. Defensive and offensive data strategies are therefore complimentary, and firms need to be able to pivot seamlessly between the two.

“The danger is that as companies invest in offensive capabilities, they overlook the necessary operational data foundation. If this happens, firms may find that their investments fail to deliver as expected on a scope, timelines, and cost perspective. RIMES can help in such cases. Through our Managed Data Services, we can take care of the data sourcing, mastering and governance needed for a robust and elastic defensive data strategy. This means that firms can focus solely on offensive insights-driven data activity. Operational data management isn’t alpha or core to a firm, but it is essential. It therefore makes sense to take this service from a company that treats it as their alpha.

“Finally, within the asset management sector, data is still not perceived as a career. However, I would suggest that as people who understand the operational, technical and commercial nature of data are in short supply, the role is one that can carry a premium and provide skills that can be used across industries.”

RIMES Managed Data Services is a proven data operating platform that helps firms of all sizes and in all regions align their data consumption closely with business needs. Contact us to learn more.

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