Buy Side Seeks To Shore Up Margins Using The Cloud09.26.2019
IHS Markit, a world leader in critical information, analytics and solutions, released the findings of research conducted by WBR Insights looking at key trends in data management among asset managers in Europe and North America with $10-100 billion in assets under management (AUM).
The research, which was commissioned by IHS Markit, paints a positive picture of an industry segment becoming more strategic and sophisticated in its approach to data management. The findings also show, however, that this part of the market is not immune to the pressures of mounting fees, rising costs and demanding regulations, as firms seek to shore up margins by using the cloud to focus on value-add activities and invest in data warehousing technology to support growing reporting requirements.
Key findings include:
- 52% of firms use the cloud for data management today and a further 28% plan to migrate data management to the cloud in the next 18 months
- Almost half of firms (46%) will have a data warehouse in place within two years reflecting the many new reporting requirements facing the buy side today
- Two-thirds report that their business teams have limited/no visibility of where data came from, who touched it, how it was altered and where it went. More than a quarter said they have no visibility at all of data lineage.
“The survey results demonstrate that we have reached a tipping point for cloud adoption among the buy side as it fast becomes the default deployment option for firms with $10-100 billion AUM,” said Andrew Eisen, global head of EDM and thinkFolio at IHS Markit. “Firms cite the ability to offload administrative burdens (42%) as the biggest benefit of moving to the cloud. It is therefore no surprise to find that respondents see the most value in moving application management to the cloud. This finding also reflects how thinking around the cloud has evolved beyond infrastructure.”
The findings show there is a major gap in the way firms aggregate, store and structure data to support reporting, with 39% responding that they use multiple marts and spreadsheets. However, a change is underway, as 34% plan to implement a data warehouse in the next 18-24 months. This will bring the total with a data warehouse to 46% in two years reflecting the need for this technology to manage a wealth of new reporting requirements.
Firms now need to tackle the challenge of data transparency, so they can be confident in the accuracy of the data they are using daily for decision-making, reporting, client communication and regulatory compliance.
“The industry is grappling with a wide range of market changes, including new regulatory frameworks, macro-economic events, fee compression and the challenge of generating returns from alternative investments,” said Eisen. “As firms adopt more complex operating models in response to these issues, many realize it is unsustainable to rely on disparate systems and spreadsheets for data management; these types of set-ups will never provide a comprehensive, trusted view of a firm’s operations and performance. As a result, buy-side institutions are investing in the latest data management technology to deliver timely, trusted, accurate and consistent data,” Eisen concluded.
To download the report and access the full set of findings, please click here.
Source: IHS Markit
The suite enables GAM to seamlessly manage market risk exposure and liquidity and investment risk.
Asset manager anticipates an SEC decision on converting its fund to a spot bitcoin ETF by early July.
Fidelity continues to hire thousands to support cryptocurrency.
Net sales registered net outflows of €3bn, compared to €42bn in March 2022.
Justin Chapman will lead the Digital Assets and Financial Markets group.