Sara Benwell: How is the world of data management changing – and how is data making your operations harder / easier?

Megan Talmage and Julie Andrews: Being a quantitative fund, we’ve always had a strong focus on data. It’s the most crucial part of our fund management process, and it’s equally vital to all of our back office processes.

Starting out, we wanted to ensure that we had a centralised, secure database which was flexible and scalable to new products, jurisdictions and system inputs.

It’s critical to us to have secure, high quality and maintained operational and investment data to service the business needs.

"Being a quantitative fund, we’ve always had a strong focus on data"

With constantly changing regulatory requirements we need to ensure that our data collection and management is ‘future proof’, but also that the data we are collecting and storing is accurate, appropriate and relevant.

Data is critical to all parts of investment process and as such it is essential to have a clear reconciliation between data being used for investment decisions, performance attribution and reporting, risk and regulatory reporting. 

We are constantly researching and reviewing alternative data, storage systems and online data warehousing.

It would be remiss to rely only on systems providers to collate and manage all firm data. It’s important to maintain certain data sets in-house, whilst leveraging data providers for commoditised data - in order to be getting the ‘best of both worlds’.

"We are seeing greatly increased costs to fund managers and owners"

The ability to have centralised access to clean, verified operational and investment data allows for significant automation, reporting and analysis tools to be built from this – allowing for more efficiency, time savings and accuracy for the operational parts of the business.

As a larger industry trend, we are seeing greatly increased costs to fund managers and owners due to the greater needs and expectations around data.

The costs to centralise, in-house and manage existing disparate data sources across an existing organisation (particularly a large one) can be a huge cost undertaking and operational risk challenge.

For new entrants to the market, these data collation and maintenance requirements are creating higher cost barriers to entry.

Sara: Are data storage trends impacting the skills and qualifications that people in the business need?

Megan and Julie: Data storage and maintenance should be a key risk function of an asset management business.

The increase in automation means that system expertise, data analysis skills, and programming are highly relevant now to every part of a business, not just for front office quant analysts.

"We are looking for people with data and programming skills across all parts of the business"

For example, we are looking for people with data and programming skills across all parts of the business as we hire, to ensure that operationally we have the skills to leverage the data we are collating.

In particular, we see this skill set this is likely to become more important in areas such as risk and compliance.

Sara: Which data trends will most impact fund operators over the next five years?

We think a couple of trends in this space are around continued proliferation and development of in house systems and applications, and the increasing importance of data within organisations.

System selection and implementation is a huge commercial decision for a business that has the ability to add or detract significant value to the bottom line.

"We see data being elevated to its own ‘sphere’ of importance within the operations of a business

System planning and integration is likely to move higher up the organisation value chain, outside of the traditional user or IT department focus, to a key risk area of any business.

As for data, we see this potentially being elevated to its own ‘sphere’ of importance within the operations of a business, rather than being seen as simply within the sphere of the IT domain.

As organisations in funds management increasingly automate and rely more heavily on data with less human oversight, we can see data governance, security and maintenance becoming a much larger part of the risk and operational environment.

This interview is part of a series, for part one, which looks at how Blue Orbit Asset Management has harnessed technology to thrive through the coronavirus pandemic click here.

 

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