RIMES, the leading provider of managed data services to the financial services industry, today announced survey results that highlight the rising importance of regulation on the agenda of buy-side firms and also the evolution of good data governance from being a best practice to a must. Conducted in conjunction with RIMES’ recent Data Governance Conferences in New York and London, survey respondents included 80 C-level individuals and heads of department at 42 asset management firms, custodians and other asset owners across the US and UK.
With Dodd-Frank and EMIR requiring improved data governance, 86% of respondents foresee these regulations as having a medium-to-high cost impact on their data operations. When asked to describe their organizations’ level of maturity for data governance, 82% selected “emerging” or “work in progress,” indicating that much work remains in this area for a large majority of buy-side firms. Showcasing the low level of certainty and readiness across the industry, nearly two-thirds of respondents (62%) reported being unprepared or unsure if their organizations are prepared to address regulatory demands for increased transparency and reporting.
According to Alessandro Ferrari, SVP global marketing at RIMES, “Between pending regulation and the increasing complexity and volume of data that asset managers face, firms must work to achieve maturity in data governance. While the cost of doing so, for firms of all sizes, is significant at the outset, having proper data governance should now be the norm. The costs of inaction are much greater as complexity clogs the business machinery and regulations threaten sanctions.”
Highlighting the myriad challenges confronting the buy-side at this crucial juncture, respondents were relatively evenly split when asked to identify what is most impacting decisions related to data management solutions. Rising costs were noted by 22%, growing client demands by 23%, onerous regulatory requirements by 26% and the adoption of more complex investment instruments, products and strategies by 29%.
“Though there are multiple drivers to good data governance, it is noteworthy that regulation is now getting equal billing which was not necessarily the case as little as a year ago,” explains Steve Cheng, Global Head of Data Management Solutions at RIMES. “For buy-side firms to keep pace with today’s regulatory, operational and reporting demands, implementing effective data governance is a must.”
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