With over 90% of financial institutions planning to increase their data budgets over the next 12 months¹ a recent panel discussion hosted by Brown Brothers Harriman saw experts from Schroders, Impax Asset Management, Mirador Solutions Consultancy, and Euroclear share their perspectives on what makes a good data strategy, the effectiveness of data platforms and the cost of inaction on data.

The discussion, chaired by BBH managing director, Infomediary Data Solutions , Laura Ghaemian, focused on:

• Data strategy design and implementation: navigating the cultural relationship with data and achieving board-level buy in 
• Data as a strategic asset: turning fragmented data into actionable insights.

The role that outsourcing can play in delivery of an effective data strategy
According to Ghaemian, getting data architecture right and producing operative, trusted master data are critical for success in a modern investment world where robust data management is key.

Acknowledging the complexities involved in data restructuring projects, she drew on the analogy that implementing data strategies could be like “performing open heart surgery on a marathon runner.”

More widely, panelists pointed to the importance of securing board room buy-in to advance critical data initiatives at a corporate level.

According to Gareth Cocks, Chief Executive Officer of Mirador Solutions Consultancy, “Unlocking the value and potential of your data comes down to how successful you are in getting the organization to adopt its Data Strategy. It is imperative to gain boardroom support for these initiatives. Establishing how data correlates with and supports what your organization or client is trying to achieve within its business goals is the cornerstone of successful adoption.”

“Once you start to gain board-level support, you can begin to drive a change in the organization’s relationship with data, as people start to understand its true value and overarching influence in delivering successful business outcomes. It then becomes much easier to start thinking about data as a strategic asset— something to nurture and value. Organizations must also have the right Data Governance Framework and Data Operating Model in place to unlock that value.”

Market evolution
Commenting on the evolving nature of industry data management and data platforms, Nadia Rosse, Global Head of Data, Sharing Platform - Product Management at Euroclear said: “Data platforms give us the opportunity to collect, monetize, and reconcile the data of all our partners and clients. While some areas of the industry are becoming more commoditized, we are gaining a better understanding of the core data and how it can help us and our clients.

“Clients are looking for better insights from their data and we are transitioning and helping drive the evolution of data strategies to support them. We can store data, separate it from the core and are now able to offer much more specific data services for customers. That said, you cannot have a good data platform without a good data strategy.”

Peter Jackson, Interim Global Head of Data Management at Schroders, noted the complexity of many data projects, highlighting the importance of engaging senior staff at the heart of data implementation.

“It is important that staff with extensive experience and knowledge of data have a strong say in project implementation. Their influence can help maximize access to the valuable data sources which can lie buried - and consequently be ignored - by many organizations,” he said.

Commenting on the cost of data project implementation versus benefits, Impax Asset Management Global Chief Operating Officer, Darren Johnson warned of the economic dangers of inertia.

“While project implementation costs money, when it comes to data, there is also a cost to inaction. Intelligent and timely use of data can help managers address client queries quickly and effectively. Client-driven organizations like investment managers need to be very nimble and able to understand the power of their data and be able to use it where they can be more responsive to clients.”

“Many firms have thought about data, but not about how data can really give them the type of insights that can give them an edge over competitors in making an investment decision or delivering more alpha,” he added.

Data governance
The panel underlined the need for strong data governance and taking a considered and cautious approach to AI adoption in an increasingly complex and data driven landscape. Panelists also reflected on data storage and its associated costs, exploring the tradeoff between the added capability and skills outsourcing partners could bring versus the added complexity a multi-partner outsourcing arrangement might create.

Commenting on the need for good communication with outsourcing partners and clearly delineated responsibilities, Schroders’ Jackson said:

“In any outsourcing arrangement you need to decide who takes responsibility for what. Outsourcing can help asset managers boost their capability and skills, but it can also add complexity. You need to understand the roles and responsibilities as data moves ‘across the fence’, with clear boundaries between the various players involved.”

Describing some of the pros and cons of outsourcing, Impax’s Johnson added: “While outsourcing can bring some real benefits, problem can occur when you use several outsourcing vendors. Managing that complexity can become difficult and a tricky challenge in itself.”