A recent survey suggests asset managers still have a long way to go to before they are truly using data and knowledge for business success.
The importance of data to the success of asset management firms has long been highlighted, yet results from a recent survey by consultancy firm, Alpha FMC, suggest asset managers still have a long way to go to be at the forefront of utilising data for business success. It seems even forward-thinking companies have been focused on managing the volume and storage of data, rather than really diving into how that information could be used to improve outcomes for clients. Despite the appearance of the Chief Data Officer role in financial services organisations nearly a decade ago, progress appears to have been very slow.
According to Alpha FMC’s report, ‘2021 Data Strategy & Operating Models’, some 95% of the respondents were still at the “Getting Organised” stage or worse in terms of the data maturity curve – not a single firm from the 38 that participated in the survey rated themselves as “Innovators”.
Furthermore, as many as 68% of respondents said that data governance remained siloed by function within their companies, with 19% intending to appoint a Chief Data officer and only 19% already having someone in such a role.
The positive news is that there does seem to be increased urgency and intention to improve enterprise data management amongst asset managers, particularly in light of the pandemic. The commercial risk to those firms who continue to drag their feet in this area must be high as client expectations increase and the ability to respond quickly and effectively to sudden events, such as the pandemic, become critical.
Effective data management is a key foundation stone to successful knowledge management and complementary strategies for both will allow firms to make the most of the internal and external sources of data that they have invested in. Efficiency and scalability are key goals – being able to get the best information and assimilate it quickly so it can inform investment decisions and client strategies should gain asset managers competitive advantage. Sophisticated knowledge tools using artificial intelligence and machine learning will increasingly be used for rapid analysis of large data sets, research, and predictions to enhance portfolio managers’ skills. All of these tools improve access to information and knowledge, provide clarity for investment decisions and reinforce risk management approaches needed to better manage portfolios.
KiteEdge enables firms to turn knowledge into advantage by combining multiple search techniques, including ontology (a domain-specific structure created to help understand the component elements and the relationships of a content universe), to drive both effective search and increased collaboration. Users can also customise the ontology to map their investment process onto the search mechanism itself. Internal experts, previously undiscovered by a user, can also be readily identified allowing time-efficient, targeted conversations rather than scattergun “Does anybody know?” pleas for help.