Asset owners and investment managers across the globe are sitting on a goldmine of investment data which, if fully harnessed, can lead to better outcomes for investors and facilitate better decision making by investment managers. 

Over the past 18 months, asset owners and investment managers are coming to understand the importance of investment data management, which refers to the collection, organisation, enrichment and distribution of data relating to investment transactions and portfolios.

A recent report by Aite Group revealed that achieving effective investment data management is a high priority for asset and wealth management firms globally. Over 90 per cent of the respondents had noticed a significant uptick in data aggregation requirements over the last 12 months. 

There is no denying that burdensome regulatory demands are driving asset owners and investment managers to pay more attention to investment data. 

From an Australian perspective, superannuation regulation has been a big driver of the demand for investment data management, - it’s not the only driver by any means, but it’s certainly an area of great debate at present.

Regulators are right in demanding more complex and thorough reporting on investments, and their performance and composition. After all, a more transparent investment industry will ultimately benefit investors.

However, regulators globally need to clearly define their data reporting requirements and prudential standards. Solutions providers and investment firms must interpret new regulations to better understand both present and future investment data management challenges so solutions that can adequately meet regulators’ demands.

Many investment organisations have taken a short-term tactical approach to address regulatory reporting challenges, which has led to a plethora of databases, data inconsistency problems and a lot of integration code to maintain.  The ongoing operational costs of these tactical approaches can be high.

Increasingly forward-thinking asset owners and investment managers are taking a strategic and holistic approach to investment data management which preserves and builds investors’ savings whilst meeting demands for greater transparency.

Firms need to develop their businesses strategically by investing in technologies that can automate and simplify investment data management. This will lead to greater data integrity and therefore data that can be relied upon for better decision making by asset owners and their investment managers.

I invite discussion and views on this topic.