CutterBenchmarking Study Reveals Asset Managers Recognize the Value of Data, but Struggle to Manage It

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Data challenges remain for investment managers

Cutter Associates recently completed their latest benchmarking study on Data Management. Back in 2011, Cutter Associates asked its benchmarking members a question as part of a benchmarking study on data management. Did their firm recognize data as a strategic asset providing competitive advantage? The unanimous answer was “no.” By 2013, that number had climbed to 45%. Fast forward four years to 2015, and over two thirds answer “yes” to the same question.

Formal Data Management
Clearly, investment managers have invested time and resources to cultivate firm-wide awareness of the importance of data. But most still need to establish data management processes that directly support high-level business goals. Fewer than half of the firms who participated in this year’s benchmarking study have established a formal Enterprise Data Management (EDM) program. Among smaller firms, with AUM below USD 100 billion, just 33% have an EDM program.

Formal Data Governance
Although most participating investment managers are working toward establishing a formal data governance framework, only one third have achieved that goal.

A major roadblock is the expanding volume and variety of data required, driven by increases in asset complexity, regulatory requirements, and demand for investment information from internal and external clients. As data volume has increased, so too have the costs associated with maintaining the data at the same time that internal budgetary pressures grow.

Effective Funding
Among the participating investment managers, just 6% have enterprise data management as a standalone budgetary item. For 41% of participants, data management is not funded independently, but rather as a component of IT projects. Funding data management through IT makes it harder to get buy-in from the business side. Having a representative from each data domain (e.g. market data, client data, account data) be part of the budgetary process can help to secure adequate resources.

Clearly, despite the recognition of data as a strategic asset, firms still have some way to go to be better managers of their data.

Full results of the studies are available for CutterBenchmarking clients online at http://www.cutterassociates.com.

About Cutter Associates
Cutter Associates, LLC serves the operational and technology needs of the global asset management industry, providing clients the tools and services they need to be successful. By leveraging multi-faceted expertise and an unrivaled knowledgebase, Cutter Associates provides clients truly independent research, exclusive member-only events, custom operations benchmarking, and a global consultancy for strategic advice on and delivery of operational and technology excellence. Cutter Associates works with the world’s leading asset managers, providers and servicers. Headquartered in Hingham, MA, Cutter Associates has subsidiaries in Canada and the UK, and is on the web at http://www.cutterassociates.com.

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Susan Donald
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