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INSIGHTS – PAGE HEADER – How Can We Achieve The Holy Grail Of Data Management? 1820X3754

How asset managers can harness their most valuable resource

The asset management industry finds itself at a pivotal moment, contending with regulatory pressures and the relentless pace of technological change. In this unstable environment, firms are seeking strategies to stay ahead of industry shifts by enhancing their operational efficiency. One valuable and often overlooked resource is data which, when harnessed effectively, can help asset managers deliver significant value for clients.

This article by Paul Ronan, Chief Technology Officer at FE fundinfo, was published in Finance Derivative Magazine #10 in January 2025 (pages 40-41).

 

Data as the Foundation of Asset Management  

Data has become an essential tool for asset managers. Many professionals will use it every day for market analysis, tracking investment performance, demonstrating outcomes to clients, and developing impactful investment strategies. But an increasing number of firms are going further. It is now recognised as the foundation of operational efficiency, providing asset managers with information to better track performance and develop strategies to drive growth. Moreover, data paves the way for integrating advanced technologies, such as artificial intelligence, into everyday operations.  

Research from FE fundinfo’s Asset Managers Report highlights the growing importance of data management, with 48% of asset managers planning significant investments in this area. Additionally, 88% agree that accurate, timely data is crucial for driving asset growth. In today’s environment, data-driven decision-making is not a luxury; it is a necessity. However, turning this goal into reality presents significant challenges.  

 

Building a Golden Source of Data  

Many firms still rely on outdated data management practices, such as manually sharing spreadsheets, which creates silos and increases the risk of errors. These silos, particularly between the front, middle, and back offices, can lead to inefficiencies. Addressing these issues involves creating seamless data flows across organisations. Technologies such as Application Programming Interfaces (APIs) allow different systems to communicate efficiently, enabling real-time data access. This connectivity is crucial for identifying trends quickly and making informed decisions, as well as reducing errors and streamlining operations.  

Furthermore, to fully realise data’s potential, asset managers need to build a “golden source”—a single, centralised, and validated repository of data. This ensures that the data is accurate, consistent, and ready for future use, such as in advanced analytics or the integration of AI. Without this centralised source, duplicated or outdated data will undermine efforts to drive innovation. Creating a golden source is also key for regulatory compliance, helping asset managers better meet investor transparency requirements and streamline their reporting processes.  

 

Poised for Future Innovation  

The benefits of clean, connected data extend beyond operational efficiency. AI and machine learning have vast potential to revolutionise asset management, but can only be effectively harnessed when used with a complete, cohesive set of data. When leveraged correctly, they have the potential to streamline a wide range of processes, from automating administrative tasks, to integrating data for better risk management practice, as well as accelerating investment research.  

By investing in their data infrastructure, asset managers can fully harness AI’s capabilities in the future. According to research from FE fundinfo, asset managers are still in the early stages of exploring AI use cases, with 44% stuck in the research phase. Those who refine their data capabilities now will be best poised to capitalise on the future opportunities presented by AI.  

 

The Foundation for Future Advancements  

Asset managers that successfully utilise data will unlock unprecedented innovation and significant growth opportunities. Data is not just a tool for the present but a foundation for future advancements. Therefore, the goal of improved data infrastructure should extend beyond individual firms. The broader vision must be a more connected and integrated investment industry, where high-quality data flows seamlessly between asset managers, financial advisers, and investors, creating a collaborative ecosystem that benefits all parties.  

Data remains the most underutilised resource in the asset management industry today. However, by strategically investing in the right tools, and building robust processes, firms can unlock its immense potential. When data is effectively managed, centralised, and shared across the entire value chain, it can drive operational efficiency and foster innovation, leading to enhanced outcomes for both asset managers and clients.