Enterprise Data Management: Pain Points for Asset Managers

From portfolio setup to risk assessment, the ability to utilize data efficiently can make or break an investment strategy. As the volume and variety of data sources continue to grow, however, many firms are struggling to keep up.

IVP recently hosted a webinar to explore this challenge: how to establish an effective enterprise data management strategy. The event brought together experts from across the financial spectrum, including asset managers, hedge funds, private equity firms, and more.

One of the most enlightening parts was when attendees shared their data management pain points. In this blog, we will look at the top concerns and offer a way to solve them.

Streamlining Data Flows

When asked about how easy it is to set up a new data source, only 40% of respondents found the process “easy and quick.” This highlights the prevalent issue asset managers face when attempting to seamlessly integrate disparate data sources into a decision-making framework.

In an industry where well-informed decisions can translate into millions of dollars, the ability to swiftly integrate and analyze data from a wide range of sources is paramount. Delays in data integration can lead to increased operational risk, suboptimal investment choices, and ultimately, diminished returns for clients.

Unifying Fragmented Data

Perhaps the most striking revelation was that 80% of respondents lacked a centralized location for data discovery and consumption. This kind of fragmentation, which results in isolated data silos, poses a significant threat to effective decision-making.

For example, imagine a scenario in which portfolio managers, risk analysts, and compliance officers are all working with a different data set stored in a different system. This significantly increases the risk of inconsistencies, duplication of efforts, and missed insights. A centralized data repository that is accessible to all stakeholders, on the other hand, is the foundation for a unified strategic approach as well as robust data governance and analytics.

Ensuring Data Quality and Compliance

When it comes to data governance, 67% of respondents consider it “extremely important” for their organizations. This consensus underscores the critical role that data quality checks and data stewardship play in the asset management industry.

In short, effective data governance ensures the accuracy, completeness, and timeliness of the data used for investment decisions. Governance also establishes clear roles and responsibilities for data management, fosters collaboration between business and IT teams, and enables compliance with evolving regulatory requirements.

The path to robust data governance is not without its challenges, however. Legacy systems, siloed departments, and a lack of standardized processes can all hinder effective governance. Overcoming these issues requires a strategic approach, one that balances the need for centralized control with the flexibility to adapt to changing business needs.

Identifying and Resolving Issues Proactively

When asked about the ease of noticing and resolving data issues, only 33% of respondents found it “easy.” This statistic highlights a critical gap in many asset management firms’ data management strategies: the ability to quickly identify and resolve errors.

Accurate decisions depend on accurate data, so even minor discrepancies can have significant consequences. A misplaced decimal point, a delayed data feed, or an incorrect calculation can lead to flawed investment decisions and potential losses. The ability to monitor data quality proactively, detect anomalies, and swiftly resolve them is essential for maintaining the integrity of investment processes.

Tracing Data from Source to Insight

Finally, our poll revealed that only 33% of respondents found it “easy” to backtrack data from the  source in order to see all the transformations applied to it as part of the process. This lack of data lineage visibility poses significant challenges to asset managers.

Understanding the provenance of data, the transformations it has undergone, and the impact of those changes on downstream processes is crucial for ensuring data accuracy and reliability. Without clear data lineage, it becomes exponentially more difficult to troubleshoot errors, comply with regulatory requirements, and make informed decisions.

Navigate Data More Easily with IVP

IVP has a unique understanding of the complexities asset management firms face when it comes to effective data management. Our expertise in the financial industry and data management technology positions us as a trusted partner in your effort to create a more effective data management strategy.

By leveraging our expertise, embracing innovative technologies, and fostering a culture of data-driven decision-making, asset management firms can strengthen their data management strategies and unlock the full potential of their data.

To learn more, join our upcoming webinars to hear our experts as they dive deeper into the strategies and tactics for world-class data management. Or contact us directly to set up a consultation.

The future is data-driven. Will you be ready?