Rising numbers of organisations moving to establish their own data management platforms are finding their custodians are falling short in meeting their data needs. But achieving synergy with the needs of investment teams, and avoiding the wasteful production of redundant data, is no simple feat.
“You’ve got a standard approach that covers the majority of the requirements, and then you need to have that flexibility to tweak your model, your processes and your workflows around each individual customer,” Guillaume Rondy (pictured), head of APAC data management at Simcorp said.
With many organisations making headway in data management, Rondy said areas like alternatives and ESG are still in flux and require a bespoke approach with the firm’s clients.
In a panel discussion on the topic of data management at Investment Magazine’s Investment Operations Conference in March, Simcorp’s Rondy joined Bruce Russell from Shoreline Consulting and Local Government Super’s Stuart Hill raising the challenges associated with implementing off the shelf data solutions.
Organisations often begin by seeking “reliable, fit-for-purpose operational and portfolio data,” Russell, who is executive director at Shoreline Consulting said.
But very often they move into establishing their own data management platforms to gain data independence and be no longer beholden to their custodians in managing, configuring and accessing data in a way that makes sense to them, he added,
An audience polling question during the panel discussion found 43 per cent were unhappy with their custodian in providing their needs for data as a service.
But making this data relevant and insightful to the investment teams is a major challenge and there isn’t one simple answer, Russell said.
“The information that the investment teams need differs depending on the decisions they’re making, the asset classes they’re managing and really how it fits into their investment process,” Russell said.
The process should begin by looking at the investment process and what data will meaningfully change investment activities, he said.
“One of the challenges that I think organisations have faced historically is that the investment process and the investment team is a bit of a black box,” Russell said. “And so what happens is there will be a request to say ‘I want XYZ data set’, and you never really know why.”
This silo between support functions and the investment team needs to be addressed to prevent costs blowing out, he said. Organisations also need to periodically review what data they are bringing in, and whether it is still necessary.
Hill, who is head of investment operations at Local Government Super, talked through the process of tendering and implementing a data management strategy within Local Government Super.
He said he didn’t see the process moving Local Government Super away from its custodian, but rather getting the most out of the relationship.
“It’s a really healthy exercise in terms of…asking those questions and pushing the boundaries if you like, and really…getting the most out of your custodian,” Hill said.
“So in terms of custodians and what they offer, at the end of the day data…is not their core function. Now whether that will change or not is a question probably for another panel.”
