As the investment management landscape continues to evolve, one aspect remains constant — data is key and arguably one of the most valuable assets a company has, after its people.
However, the continued structural shifts and changing regulatory requirements in financial markets often complicate the process for firms seeking to make sense of massive amounts of data. Asset managers are expected to report more thoroughly to a wider variety of stakeholders and are facing intensified scrutiny from clients to provide more ad hoc and bespoke reporting. Add a global pandemic to the mix and access to information may be compromised.
Putting the pieces together
In order to navigate a sea of data, financial firms need the resources and platform to derive context from the information and as a result, drive value. Fragmented operating models and data silos, however, make it difficult to source truth, understand the total cost of ownership and know if there is a duplication of resources, as well as introduce errors and operational risks.
This is particularly prevalent among investment managers who need to be able to quickly consolidate different data sources to provide a timely and accurate picture to clients. Working with a fully connected front-to-back office technology provider that can aggregate data, automate processes, and provide a single source of truth is key for providing data with context.
For example, a fund may have stock lending fees and if this data is not distributed to the right people in the right context, its value may be lost (e.g. unconsolidated data within a hard drive and in data silos).
Driving competitive advantage with secure access to information
An outsourced technology provider should provide a secure operating model and strong, straight-through processing while ensuring access to firm-wide data through a central repository.
This not only makes it possible to consolidate data but also resolves issues with accessing information, which became particularly apparent for firms struggling to adequately adapt to the remote work environment earlier this year.
A recent coronavirus impact report by HFM Insights found that one in five $5bn+ hedge fund managers said the rollout of their business continuity plan had not been a success during the Covid-19 outbreak and a higher percentage of smaller firms were likely to outsource their technology requirements.
Data without context is simply just data. Data with context is value. With contextual and accurate data, fund managers will be better placed to discover strategic and actionable insights within their existing, disparate data sources, scale their businesses and drive competitive advantage.