Customers are telling fund operators what they need from data strategies, which is bringing challenges to operators and the service providers who are often scrambling to keep up.

The thirst for data is never going to be abated, and this is across all levels of the organisation

Clear Path Analysis’s recently released Fund Technology, Data & Operations, Europe 2022 report, saw industry leaders from companies including Nikko Asset Management and Storebrand Asset Management looks at the best ways fund operators can manage their data to be a profitable part of the business and not a burden. 

“The thirst for data is never going to be abated, and this is across all levels of the organisation, not just the investment teams looking for the alternatives data sets,” said Chris Searle, Head of Business Applications, at London-based fintech FINBOURNE Technology.

We have seen the challenges with regulatory initiatives, and this is driving the transparency from third party providers

Not knowing what to do with data is an industry-wide problem. A KPMG guide advised asset managers to give their data a notional value and recommended putting in place an agreed framework for scoring the relative business value (current plus potential) of data entities within the data asset base. 

“We have seen the challenges with regulatory initiatives, and this is driving a lot of the transparency from third party providers, which has been a positive change,” Searle said. He added that there has been a huge explosion in big data and the amount of financial data and marketplaces that are out there currently.

Broken systems, manual workarounds, and convoluted closed-ended systems will erode this trust in data

“There is a plethora of information available, so it becomes more than just hoarding the data, organisations need to have a platform that makes this information discoverable, accessible and ultimately, usable,” said Searle. “Systems built without sharing in mind are only going to create islands of data and fragmentation. Ultimately, you need to build trust in the data and the only way you can do this is to have it properly explainable.”

Searle added that broken systems, manual workarounds, and convoluted closed-ended systems will erode this trust in data, and that this issue is a major challenge for the industry as a whole.

According to a study from Northern Trust and the Economist Intelligence Unit, 28% of asset managers listed their top difficulty was that they had so much data they couldn’t find out what was actually useful for them.

Entitlements, permissioning, and role-based access management are key, especially with a Cloud-based solution

On top of these rapid developments in data, is the ways that the adoption of new data technologies, including Cloud-based storage, made risk around it a more pervasive concern for organisations across the industry. Pre-Covid-19, the number of ransomware attacks increased by 485% in 2020 and has increased since then.

“Entitlements, permissioning, and role-based access management are key, especially with a Cloud-based solution,” said Searle. “Our bread and butter are that we can securely deliver the data that your permissioned to. It is not just these factors but also the discoverability of that data.”

“A lot of firms don’t have a catalogue of what they have available, and we see firms who have bought the same data multiple times because they didn’t realise that different areas were using the same information across the organisation,” he said.

This also raises the issue of clients increasingly asking businesses about having data concerns and asking for solutions.

“Part of this is also an educational thing for users,” Searle said. “We have an API First Strategy, and this provides toolsets to make efficient access to the data. Without the good education of what the data is, it becomes a little bit of a problem.”

To learn more about this issue and others facing fund operators, read our report Fund Technology, Data & Operations, Europe 2022 here.

 

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