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RIMES 2014 Buy-Side Survey Uncovers Divergent Views Between Data End Users and Central Management Functions at Buy-Side Firms

 

RIMES, the leading provider of managed data services for the buy-side, today revealed the results of the RIMES 2014 Buy-Side Survey. Findings highlight differing views between end users of data and central management functions. Although an increasing number of firms recognize the crucial importance of good data governance, the lack of a systemic approach to data management has serious consequences for the way data is acquired and used throughout firms. Many are struggling to build the right data architecture to support evolving business and compliance needs.

The 107 respondents to this year’s survey include heads of departments and senior professionals from the world’s leading institutions including asset managers, pension funds, hedge funds and insurance companies. The group spans 21 countries worldwide and represents a cross-section of business functions including compliance, risk, data management, front-office, IT, operations and performance measurement.

While 49% of overall respondents report taking a more active interest in data license agreements and audit licenses periodically to gain a deeper understanding of terms of use, only 47% of central management functions report doing so compared to 53% of end users. This endorses the view that index and benchmarks are characteristically different from other data types. Data expertise is fragmented and generally resides with end users. This explains a common lack of ownership of index data and benchmarks and a tendency for data management to be divorced from business priorities.

Although 48% of central management functions regard centralization as an overall data management priority, only 26% of end users agree. This confirms that many firms lack a consistent approach to the management of index data and benchmarks. Although centralization is perceived as beneficial to data management, end users often perceive centralization as a barrier to business agility. However, decentralized data management incurs an opportunity cost through lack of control. Many firms also find it hard to pursue tactical and strategic change simultaneously.  

Other key survey findings include:

  • 76% of respondents across all departments identify quality as the principal benefit of best practice data governance
  • 67% expect the number of indexes and benchmarks to increase (76% last year)
  • 73% of respondents anticipate increasing index data licensing costs (82% last year)
  • 85% believe that existing and emerging regulation will require some to significant resources to ensure compliance
  • 76% either have a dedicated project underway to deal with proposed legislation or a project planned, although not yet begun

As Steve Cheng, Global Head of Data Management Solutions at RIMES, explains, “The results of this year’s RIMES survey indicate that data quality improvement will continue to be a growing challenge throughout the industry and a source of internal debate between end users and central management functions within organizations. Volumes of data continue to increase and so do the number of benchmark data suppliers. The data is also increasing in complexity and vendor license agreements are more exacting about data use. Regulations are emerging as a new destabilizing force that is forcing firms to rethink data operating models. Working with the right partner can enable firms across the buy-side to build data operating platforms that meet legislative compliance requirements and business objectives simultaneously.”

RIMES also recently conducted a webinar detailing overall themes of this year’s buy-side survey results. A full recording of the webinar can be accessed here: http://www.rimes.com/rimes-webinar-replay-2014-buy-side-data-trends.

To request a copy of the 2014 Buy-Side Survey Results please contact us.

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