Data Issues Perplex Buy Side02.04.2014
RIMES, a provider of managed data services to the financial services industry, has released survey results that highlight the rising importance of regulation on the agenda of buy-side firms and also the evolution of good data governance from being a best practice to a must.
With Dodd-Frank and EMIR requiring improved data governance, 86% of respondents foresee these regulations as having a medium-to-high cost impact on their data operations. When asked to describe their organizations’ level of maturity for data governance, 82% selected “emerging” or “work in progress,” indicating that much work remains in this area for a large majority of buy-side firms.
Showcasing the low level of certainty and readiness across the industry, nearly two-thirds of respondents (62%) reported being unprepared or unsure if their organizations are prepared to address regulatory demands for increased transparency and reporting.
“Between pending regulation and the increasing complexity and volume of data that asset managers face, firms must work to achieve maturity in data governance,” said Alessandro Ferrari, head of global marketing at RIMES. “While the cost of doing so, for firms of all sizes, is significant at the outset, having proper data governance should now be the norm. The costs of inaction are much greater as complexity clogs the business machinery and regulations threaten sanctions.”
Conducted in conjunction with RIMES’ recent Data Governance Conferences in New York and London, survey respondents included 80 C-level individuals and heads of department at 42 asset management firms, custodians and other asset owners across the US and UK.
Highlighting the myriad challenges confronting the buy-side respondents were relatively evenly split when asked to identify what most is impacting decisions related to data management solutions. Rising costs were noted by 22%, growing client demands by 23%, onerous regulatory requirements by 26% and the adoption of more complex investment instruments, products and strategies by 29%.
Separately, Bonaire, a Broadridge Financial Solutions company, released the results of its client survey to determine priorities and challenges are top of mind among U.S. and global asset managers.
The most difficult challenge noted by respondents was the need to bring together holistic data from all business units and provide cross-business reporting, with 37% respondents saying that a lack of enterprise-wide data and analytics can turn everyday tasks into time consuming exercises.
Minimizing fee leakage and improving accuracy came in second with 31% noting that under- and/or over-charging of fees, inaccurate invoices and elongated billing cycles remain among the most important issues to address in order to improve the bottom line.
“Overall, leading asset managers are continuing to pursue opportunities to differentiate themselves, increase efficiency, and bring together the necessary enterprise-wide data and analytics – all while working to comply with an ever-changing regulatory environment,” said Christopher John, Bonaire’s president. “We anticipate these trends to continue well into the foreseeable future and to continue to innovate with our clients to enhance and develop new solutions to address their priorities and most difficult challenges.”
Traders are increasingly being asked how ESG fits in execution.
Richard Turner of Insight Investment sees more automation and more transparency around cost and outcomes.
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.