Asset managers are tackling a bevy of new data-related requirements, driven by clients, boards, global regulators and the FinTech disruptors. Many buy-side firms have responded by embarking on operational and technological transformation projects. Some have focused on data access and delivery, upgrading legacy data architectures using hubs, virtualization, warehouses, or data-as-a-service (DaaS); others are tackling costs and efficiency by taking advantage of newer technologies such as machine learning, robotics, and various forms of artificial intelligence (AI). As they institute these initiatives, investment managers also discover new bedrock needs: enhanced data governance, integrity and controls.
EDM Council’s Executive Director, John Bottega sat down with Olmstead Associates and Gresham Technologies’ Jan Dinger, to assess these shifting pressures, and discuss why being more data-centric can help firms execute their transformation initiatives with a greater probability of success.
Among the highlights of their interview, Olmstead framed the discussion by recapping leading industry drivers and how asset managers are challenged in how they are responding. These include:
- Addressing regulatory regulation: (LEIs for MiFID II, privacy concerns for GDPRS, or deeper fund-level reporting)
Challenge: the limitations of legacy data architectures not able to support new rules
- Infrastructure expense pressures
Challenge: managing costs while trying to develop new products and distribution methods
- Client retention & competition: (using a 360-degree view to enhance the client experience)
Challenge: delivering a higher level of client service to fend off competitors
Olmstead shared that firms have been successful by responding to these challenges by implementing data-centric solutions. Data-centric asset managers approach problem resolution by looking through the data consumers’ eyes. By looking from use to source, you quickly identify value and risk across the enterprise. This holistic approach has proven to elevate the value firms derive from their data, helps identify a path to rationalize IT systems and ultimately creates greater operational agility.
Jan Dinger commented, “At the core of the challenges they face, ensuring the data, whether structured or unstructured, is fit for purpose is key. Gresham describes this as assuring the data has the proper level of integrity—including the granularity, availability, lineage (auditability) and controls—around it for the task.”
Olmstead also noted that “firms are paying greater focus to data integrity and control because operations, technology and data managers have long been trying to build business cases to modernize systems and optimize processes to lessen technical debt and better manage their firms’ shared data.”
Bottega and Olmstead also agreed that internal technology teams and their providers need to ‘up’ their game and suggested ways on how they can accomplish that. There are two key factors that asset management firms must address when selecting an external partner:
- Get their arms around their data: gaining a holistic view of their data, or a data topology, to help understand who is using the data and how it is being accessed, processed and applied
- Scoping the shared (enterprise) data: understanding and prioritizing the shared data will clarify the scope of data to be managed by the third-party solution
For Dinger and the Gresham team, their process always starts with scope - analyzing the requirements, identifying the possible sources of data and just as importantly, possible gaps - and then implementing the solution.
Olmstead concluded that with “the growing demands on data, the heightened attention paid to technology transformation by the business, and the sophistication of options available require a technology partner who curates intelligence, facilitates data movement, transformation and workflow capabilities, and prioritizes data integrity.”
The EDM Council is a leading advocate for the development and implementation of data content standards and the publication of data management best practices. More information can be found at: www.edmcouncil.org/
Olmstead Associates is a data-centric strategic consulting firm.
John Bottega is the Executive Director of the EDM Council, a 501(c)(6) trade association and leading advocate for the development and implementation of data content standards.
Jan Dinger is Sales Director for North America at Gresham Technologies (GHT.L), a global leader in financial data integrity.