Buy Side Faces Data Challenges

Terry Flanagan

Buy-side institutions face a plethora of data management challenges characterized by isolated silos of information, inflexible structures, and limited input sources.

Many of the most promising opportunities depend upon mixed portfolios of different product types including equities, commodities, credit products, interest rate products and more. The ability to integrate data of all types into one view greatly simplifies portfolio management.

“A focus on data governance, delivery and SLAs helps guarantee the timeliness and integrity of information to internal stakeholders and external regulators,” said Richard Petti, CEO of Asset Control, a provider of financial data management technology.

Governance means understanding and controlling the source and quality of the data. “Having data of the highest integrity is crucial because it enables banks to govern their own risk reporting, measure capital adequacy accurately quantify their overall exposure as well as meet their regulatory obligations,” Petti said.

RIMES, a provider of managed data services for the buy-side, has released the RIMES Data Governance Best Practice Handbook, a step-by-step guide for investment managers, pension funds, custodians and other asset owners to build robust data governance structures for enhanced benchmark management capabilities.

In developing the Best Practice Handbook, RIMES worked in conjunction with Investit, a specialist investment management consultancy, to outline detailed guidance on how asset managers can move from their current operating models towards achieving best practice in index data and benchmark data governance.

“Given ever-greater data volumes, complexity and growing regulation, one of the most urgent issues facing the buy-side is data governance. We at RIMES have been encouraged to find that a significant number of asset management organizations are increasingly recognizing the importance of good data governance, especially over the past 12 months,” said Steve Cheng, global head of data management solutions at RIMES. “While there is an agreed need to act, many firms still struggle with the practicalities of how to implement best practice in their organizations.”

Asset Control’s client base “is arguably the strongest in the market because we’ve never wavered on our core vision of delivering data of the highest integrity,” said Petti. “The key piece of this vision is the understanding that data management is no a standalone operation, but simply one piece of the data supply chain. Thus, our immediate priority will continue to be evolving our technology to that the delivery and quality of the data remains strong.”

Additionally, Asset Control will continue to become a more integral part of risk management operations at major financial institutions. “As they stand, upcoming regulations on both sides of the Atlantic will put a premium on the integrity of data utilized to report risks, measure capital adequacy and overall exposure as well as running stress tests,” Petti said. “With these regulations coming into effect, banks are prioritizing access to historical price data as one of the key elements in the risk management framework that will address these requirements.”

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