Three Best Practices to Help Asset Managers Develop an Effective Data Management Strategy

Data volumes are growing exponentially, but how can asset managers take control of the ever growing data mountain?

Apparently, 90% of all data on Earth was created in the past two years, and the asset management industry is a key contributor.  As a fund manager, you generate more data every year.  Industry professionals must grapple with two interconnected issues that come from this avalanche of information:  how to manage volume while preventing costs from spiraling out of control.

To successfully manage data and avoid getting inundated with information, it is essential to establish strong leadership to manage a high-quality data strategy.

Northern Trust recently collaborated with the Economist Intelligence Unit to ask more than 200 asset management and insurance management executives in the U.S. and Europe about how they manage data. The results highlight an industry struggling to maximize the value of data – only 13 percent of respondents indicated that they successfully capture the full value of their data.

After reviewing our findings, we developed a framework that can help you manage your data. Here are three steps you can take to create and execute a successful data management plan:

Determine Who’s in Charge

Strong leadership makes all the difference in providing an effective data strategy. The exact title of your data management leader may vary, but you will want someone with a keen understanding of your business and strategic goals, a holistic view of your needs and the ability to collaborate with different levels of the organization.

Consider forming a working group composed of members from across your company to coordinate strategy, develop governance, and support execution and implementation. 

Improve the Data

Many mutual fund companies recognize their need for a better data strategy. However, the absence of industry-wide standards for data exchange can make it challenging for you to efficiently scrub and reconcile the data.

Streamlining and centralising data from multiple sources will allow the consistent translation and formatting of data from each source. It will also give your leadership team the opportunity to identify missing values and improve future data sets.

Integrate the Data

Integrating and formatting the data is critical to allow for seamless delivery to external systems. But because data aggregation technology is still evolving within the industry, building an internal solution can be challenging. Fund managers and administrators need to develop a system that can synthesize the volumes of data in a flexible way to meet a wide range of needs.

The appointed business leader needs to work closely with your IT professionals to determine the best data solution for your clients. It’s important to determine whether you can build internally or need to go with an outsourcing provider. Outsourced solutions can typically provide more power, flexibility, and cost-effectiveness. The design of your system should focus on improving data delivery to clients so they can make effective decisions.

Data Can Be a Competitive Advantage

By acting quickly on best practices for data management, your firm can gain a competitive edge and capture greater value from your data. More importantly, these insights will be critical in optimising your business strategy in a highly regulated and competitive asset management environment.