A poll of major European asset managers shows there is a focus on outsourcing to specialist providers rather than wholesale systems change — necessitating a strong data architecture coupled with high quality data integration.
Asset managers are investing in smarter data architectures to create a single source of data that allows them to run all aspects of their business. This reflects reduced demand for large scale transformations.
They say they are also more successful in executing their strategic roadmap when their core operations activities are interoperable, enabled by an open-architecture platform and data integration.
These views emerged at the recent InvestOps Virtual Boardroom 2021 conference, which brought together executives from firms with a wide variety of assets under management, partially or fully outsourced service models, and investment strategies.
Despite the array of firms involved, a consistent theme coming out of the event was the use of data to maximize business potential.
Data strategy is key
A poll of leaders including Chief Operating Officers (COOs) and heads of operations from a cross section of Europe’s asset managers found that 64% were pursuing a multi-provider model of outsourcing providers, SaaS and in-house solutions over the next 2-3 years.
But all speakers agreed that having a clear data strategy is key. This focus on data will not change — it underpins everything and is the forefront of operational focus going forward, the event heard.
According to one COO at a large global, well-known European asset manager, firms should adopt a “clear data architecture” as “the only way to achieve optimization.”
A partner and head of operations at one of the world’s fastest growing global asset managers noted that data stores should be created once, validated once, and then used multiple times – avoiding the need for multiple databases to be continually reconciled. This approach enabled a range of positive impacts, including a 50% reduction of staff tasked with running operations since 2016. Their business has seen staff move up the value chain as “operations engineers” instead of analysts, putting the power in the hands of these operatives to push through enhancements closest to the processes they manage.
Another head of investment operations at one of the world’s largest asset managers also commented, “The future operating complexity and market environments will continue to change at a good clip, so it makes sense to plan for flexibility across service providers, technologies, etc., and expect to need to pause, assess, adapt regularly.”