Many asset managers are struggling to become “data-driven enterprises”
The desire to move from silo-based data management to a more centralized approach is about much more than eliminating duplication and reducing costs. It also reflects growing awareness of the value hidden in asset managers’ data and the potential synergies of comparing or combining different data sets.
Ideally, firms would like to achieve strategic insight by having total transparency of their operational and investment performance — gaining the ability to “view the organization as a portfolio.”
This not only implies a holistic view across all securities, asset classes, legal entities, products, clients and markets, but also the ability to look at that data from a range of different perspectives such as compliance, profitability and investment performance.
Many asset managers are spending significant amounts in their quest for transparency, but there is no consensus on the best approach to follow.
Multiple requirements from a variety of directorates are encouraging some firms to pursue a piecemeal, silo-focused approach. This can appear to achieve comparatively quick, low-cost wins but, in our experience, isolated projects rarely provide a lasting or reliable solution. They are often a response to the limitations of existing technology, or the result of excessive delegation to a single team or function, and, when replicated across a large organization, they inevitably lead to cost multiplication.
At the other end of the spectrum, some asset managers are migrating to completely new, full-featured investment platforms supplied by major software vendors. “Big Bang” projects such as these have the potential to be more effective but, without the right governance and oversight, they tend to overrun in terms of time and cost. They can also generate uneven value for different functions or business units, and are often poorly integrated into the broader organization. Additionally the lack of flexibility impedes organizations when requirements change.