I had the opportunity last quarter to spend a lot of time on my soapbox and listening to senior executives sharing their strategic views on success. In March at our breakfast briefing in NYC I listened to our four panellists share their views on the challenges of supporting the distribution function in asset management with high quality data, and how to deal with the rise in demand by client driven regulatory reporting.
Here are a few nuggets from Q1 of ’16 that I would share:
- Only a strategic approach with C-level commitment will succeed:
You can have all the top-down and bottom-up approaches squared away, but if your initiative does not have C-level support, and even more importantly C-level commitment and engagement, then you’re doomed to failure. Note there is a very big difference between having someone’s “support” in principle and having a fully committed engagement in practice. Think about how the chicken and the pig fair when it comes to your breakfast of eggs and sausage. The chicken is supporting the engagement; the pig is fully committed!
- Investor appetite for data is increasing and will continue to do so:
Both retail and institutional clients are demanding more insight and transparency. Ultimately this translates into more data. From a retail perspective, web and factsheet demands are growing. In the new connected-world, digital strategies are pushing asset managers to deliver better web presence to an investor set that are increasingly intermediated by platforms and advisors. On the institutional front the distribution channels and consultants are demanding more data, in tighter timeframes. The depth and breadth of portfolio reporting is increasing, and the once acceptable T+30, T+60, and T+90 embargo periods are under huge pressure. Investors who are subject to regulatory oversight are driving a huge element of demand for more timely and broad portfolio reporting, as are needs being directed from more rigorous risk management oversight.
- Data capability is a reflection of your firm:
We’re all familiar with the adage ‘don’t judge a book by its cover’, but no matter how often we hear this, the natural human inclination is to come to a conclusion very quickly based on initial appearances. For an asset manager, data is their book cover! If your data delivery is tardy and quality is not up to par– then do not be surprised if prospective clients, consultants and distributors have a poor impression of your firm’s investment management capability. After all, if you cannot manage your data, it is reasonable to assume you’ll struggle to manage money.
- All executives should have the appropriate level of access to trusted data at their fingertips:
If your firm is not looking at analytic and big data tech that will bring better, more insightful data to your executives, then you’re on the outside looking in. There is exponential growth in the number of firms that are looking to blend their product, client, flows and distribution data into big data type tech (e.g. Cassandra or Hadoop). These firms then look to layer visual analytic tech on top (e.g. Tableau, Logi, or Birst) to deliver better intelligence to the C-Level suite. The problem is that at the start of some of these projects, the priority is about getting the data from anywhere it can be found; what will really make the project successful is ensuring the data entering the analytic field is coming from trusted, approved sources. While it’s great to have highly visual data views that will deliver market insight and ultimately drive decisions on the firms distribution strategy, bear in mind these reports MUST have a solid data foundation or the value of them is highly questionable.
- A data governance model must have context of usage and full accountability:
Governance in the industry is starting to mature which is a hugely encouraging sign. Now when you hear firms talking about governance, instead of the old debate which centred on data quality management and stewardship, the broader governance picture is coming into play. The discussions I am hearing these days are more likely to be centred on ownership of data and appropriate contextual correct usage of the data. A key development is also the growth in ‘public facing data governance’ committees and steering groups. In firms with mature governance these teams have stakeholders from product, compliance, legal, performance, operations and front-office distribution to ensure all the correct people are involved in decisions about data being used in client, distributor and regulator facing channels.
The tasks outlined for asset managers in the above might seem daunting. To some firms the work required might equate to climbing Everest, however the resulting operating model is worth the difficult implementation in order to achieve long term success.