A new report from BNP Paribas and the Economist Intelligence Unit has shed light on how pension funds, superannuation funds and insurance companies are coming up with new strategies to meet their long-term goals. In Governance, Cost and Sustainable Investing, BNP Paribas explains how pressures from regulators and central banks are forcing asset owners to think again about how they run their operations. Crucially, in addition to changing perspectives on risk, the report highlights just how important effective data management is becoming to asset owners around the world.
It is a trend that RIMES has been talking about with our customers for some time now: regulators are introducing ever-more stringent measures, particularly around data provision, and as a result the costs of compliance are increasing. But it is not only in terms of cost that these regulations are impacting asset owners – data quality has become more of an issue than ever. Indeed, BNP Paribas states that data and collateral requirements are the guiding force behind new strategic sourcing decisions, with data quality the primary issue where multiple partners are involved.
When it comes to ensuring data quality, however, BNP Paribas reports that significant issues remain, not least when it comes to the challenge of sharing data between stakeholders and reporting correctly and cost-effectively to regulators. The net result of these new challenges is that asset owners are rethinking their strategies: on the one hand looking to bring asset management back in-house, while on the other looking to managed service providers to support them with scalable resources that deliver a holistic view of the entire investment lifecycle.
The second of these trends chimes well with what RIMES sees across our operations. Asset owners and managers alike are aiming to focus on their core business functions while leaving the heavy lifting of data management and governance to managed data services providers such as RIMES. Indeed, as asset owners look to transform along the lines suggested by BNP Paribas, managed data services will prove invaluable by, for example, connecting asset owners with custodian banks to set up data capabilities comprising the systems, expertise and governance they require. RIMES serves eight of the top ten custodian banks and understand how this new approach to data management can help data owners simplify an increasingly complex data environment.
The new report from BNP Paribas sheds further light on the fast-changing financial services market. One thing above all else is clear: as the market becomes more complex, funds and firms need to put in place the right partnership models, and the right partners, if they are to succeed.
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