Data management: How can buy-side companies integrate it within a virtuous cycle?

For the past two decades or so, digitalisation has been a both unstoppable and exponential trend across the entire financial industry, which has consequently led to a dramatic escalation in data production and needs across the investment management value chain.

Moreover, this momentum has only been further accelerated by the COVID-19 crisis as well as by the resulting massive take-up of remote working and revived market volatility, which tends to generate greater trade volumes. Therefore, data management is a critical and strategic focus for buy-side companies, whether for investment decision-making, steering and monitoring of day-to-day operations or reporting to stakeholders.

The (over)abundance of data is obviously an opportunity for investment professionals in the sense that never before have asset managers had so much data available to assess and reaffirm their investment decisions. But at the same time, sourcing, processing, and delivering data require significant resources as well as very specific knowledge and skills, which are unfortunately not always readily available.

Buy-side companies are thus increasingly realising they need to build up their data management set-up if they are to operate efficiently and transparently.

For this white paper, we teamed up with SimCorp to explore the various factors and approaches that may improve investment professionals’ data management and operational organisations and, ultimately, to propose models that could be suitable for a wide range of financial institutions.

We have chosen to deal with this major topic through six themes that we felt were both complementary and of significant importance:

1.  The benefits of an IBOR¹-based operational set-up to ensure a unified exhaustive view of both positions and operations,

2. The necessity of open data architecture to achieve seamless multilateral connectivity and effective multisource data management,

3. The essential optimisation of data usage and monitoring to streamline resources and enhance operational efficiency,

4. The absolute need to source and integrate ESG² data  to support sustainable investment strategies and facilitate decision-making,

5. The catalyst effect of effective data management in improving client experience via optimal data processing and delivery,

6. And finally, the impact of data on execution performance, both in terms of acquisition cost for accessing liquidity and as a component of management and reporting quality.

In the end, we hope you enjoy reading this white paper, which consolidates expert views to help our clients go further in their development, as much as we have enjoyed putting it together.

¹Investment book of record
²Environmental, social and governance