Buy-side firms say implementing governance programs is now their highest data management priority
Buy-side firms view good data governance as key to improving data quality and business efficiency, yet many still find it difficult to maintain good data governance programs, reveals the fifth Annual Buy-Side Survey from RIMES, the leading provider of managed data services for the buy-side.
RIMES’ survey reveals that 65% of respondents now see implementing data governance as their data management priority, compared to 62% in 2016; topping other priorities such as data quality improvement and cost control. This seems to be because the asset managers, owners and servicers surveyed see data governance as a means of realizing strategic goals such as improving data quality (80%), driving efficiency (68%), reducing costs (40%) and enabling regulatory compliance (34%).
However, despite the clear importance of data governance to the firms surveyed, many struggle to implement a successful governance program in their organization. In fact, only 9% of the firms interviewed felt confident enough to claim they have a mature data governance program. Meanwhile, 59% of respondents report that data management teams lead data governance efforts or attempt to implement best practice – but only during strategic projects or on an ad-hoc basis.
RIMES’ survey also reveals that many firms face operational management challenges, which affects good data governance. These include sourcing and implementing data management centralization and a lack of data management expertise. Moreover, the findings suggest that few firms have the skills or capacity to quantify the potential benefits of data management projects, a factor which RIMES’ experience shows to be essential to good data governance. Only 16% of respondents have formal cost/benefit models based on audited time and effort metrics gathered before and after the project, while 50% adopt an ad-hoc approach or do not quantify the potential benefits at all.
Alessandro Ferrari, EVP Global Marketing, RIMES, commented: “With new regulations such as the Market Abuse Regulation and the incoming Benchmark Data Regulation demanding greater transparency from buy-side firms, it’s good to see our survey respondents cite governance as their top data management priority. What’s concerning is that so many continue to struggle to track which data is coming into the firm, how it is transformed, and where it’s ultimately used. The regulators won’t take kindly to that. Our advice to buy-side firms is to look for a long-term and continuous solution to their data governance needs. The result will be better data quality, increased efficiency and lower costs.”
The RIMES Survey also uncovers that firms employ a range of data operating models, comprising both in-house capabilities and external providers. As many as 61% of respondents envisage the future of data management to involve service providers managing all their third-party data, or a mixture of in-house and third-party solutions.
Alessandro Ferrari continues: “Managed data services enable firms to manage a growing volume of complex data cost-effectively, and to align data consumption closely with business needs. Significantly, the same agile deployment model can also be applied to data governance programs. Companies that go down this path will enjoy a much faster deployment and significantly lower costs than with in-house alternatives.”