Improving buyside data management: a four-point plan

Data underpins almost every aspect of the financial markets. This trend has only intensified in recent years as financial regulators have strengthened reporting and transparency requirements with buyside firms looking for new ways to compete and comply in this environment. Our recent survey shed light on the data management challenges still facing tier two and three asset managers and identified the priorities shaping firms’ data management strategies. 

Quality control

Across the industry, fractured data quality continues to cause concern with asset managers pushing the issue to the top of their priority list. Data also remains heavily fragmented at many firms with almost 60% believing that such issues are affecting up to half of their reference data.

As a range of internal and external industry factors continue to drive data volumes sky high, the ability of asset managers to accurately collect and disseminate quality data has become increasingly important. Clean and consistent data that is delivered in a timely manner across the firm will aid compliance, reduce operational risk and allow data to become an asset with genuine business value. 

From fragmentation to integration

Since data fragmentation remains a challenge, firms are looking to adopt an integrated data hub in order to improve quality and connect data to downstream consumers. In fact, 53% of buyside firms view the adoption of an integrated hub as a key data management priority.

The buyside understands the value of creating a “single version of the truth” for all data types – from reference and investment data through to static data – which can then be distributed to consumers, whether  individuals or systems, via a single, consolidated system.

Effective measurement

While the maturity of data management strategies varies from firm to firm, few are tracking data quality metrics and compliance with policies and procedures. Only 12% of respondents are both measuring performance metrics and taking remedial action.

Firms need to focus on implementing checks that will help data stewards monitor systems, measure performance and make any necessary changes to keep up with business and industry changes.

Secure budget and buy in

Many firms today are facing cost constraints, but a significant proportion remain optimistic that funding will be made available for data management projects over the next year due to the high value these initiatives deliver. In order to maintain this level of funding, data management strategies must be fully understood and supported by the C-level as well as individuals or teams with ownership of data in each of the downstream systems.

This top to bottom support is critical for gaining enterprise-wide buy-in and ensuring that it’s the business that drives a data management strategy that is closely aligned to the firm’s broader objectives.

As data flows continue to increase in volume and complexity, it’s clear that asset managers realise the importance of implementing a more robust, enterprise-wide approach to data management.  With the right strategy, the buyside can develop the necessary infrastructure to create data hubs to support integration and standardisation and ensure data quality right across the firm.