Flexibility and leadership key to data strategies
04 October 2016 London
Image: Shutterstock
Asset managers require governance and flexibility in their data strategies, according to a survey by the Economist Intelligence Unit and sponsored by Northern Trust.
The survey report noted that while most managers are looking for tools to help them gain benefit from new data, “the results show wild variance—with some institutions benefiting substantially while others are failing to gain any advantage”.
It suggested that the quality of an organisation’s data strategy, along with strong leadership to lead this strategy, can make a big difference in its ability to navigate the large volumes of data available to them.
Of the respondents, only 27 percent said that their company’s data strategy has entirely prepared it to meet the current challenges and opportunities in the market.
However, 72 percent said that their data strategy has prepared the company either ‘somewhat’ or ‘adequately’ well, and only 2 percent said they are not well prepared at all.
The majority, 80 percent, said they have a central leader for their data strategy.
Of those, the majority said that the responsibility for setting the data lies at c-level, however it is split between technology leaders, investment strategy leaders, and the c-level group as a whole. This, the report said, is because application of data analytics is spread across the whole organisation.
The survey suggested that those respondents in organisations that have their data strategy decided at c-level generally have access to all the data they need. Some 69 percent also said their strategy is at least ‘adequately’ able to meet the current challenges and opportunities, compared to 57 percent that do not have c-level leadership for their data strategy.
With regards to flexibility, the survey found that companies that have a ‘mostly’ or ‘entirely’ flexible data strategy generally capture more value from their data.
Of those that said their data strategy is flexible, 67 percent said they capture data ‘fairly or entirely well’. On the other hand, of those that said their data strategy is ‘somewhat or not at all’ flexible, only 41 percent said they capture data fairly or entirely well.
That said, in total, more than 80 percent said that they are not able to extract full value from the data at their disposal.
The survey report said: “The survey participants believe they have been broadly successful in using the deluge of data to meet regulatory requirements, improve their investment strategies and meet new business objectives. Moreover, many expect to achieve higher return on data investment over the next three years.”
“Yet a surprising number—more than four out of five—say they are not yet able to extract full value from the data they acquire. Existing data strategies, on average, do not adequately prepare firms to tackle the challenges they face, and many strategies lack the flexibility to respond effectively to the unexpected.”
The report concluded that dealing with data challenges requires strong leadership and processes for managing data on an enterprise-wide basis, with more focus on extracting insights to improve business decisions within asset managers.
“They must remain both flexible and adaptable, continuously evaluating performance as methods change to ensure that they are capturing full value from data,” the report said.
“The insights these firms gain from data analytics will be critical to optimising business strategy in an extremely dynamic and heavily-regulated market.”
The survey was conducted in September 2015, and included 201 asset and insurance management executives, approximately half of whom deal with assets exceeding $5 billion. Respondents were split between the US and Europe, and about 15 percent were based in the UK.
The survey report noted that while most managers are looking for tools to help them gain benefit from new data, “the results show wild variance—with some institutions benefiting substantially while others are failing to gain any advantage”.
It suggested that the quality of an organisation’s data strategy, along with strong leadership to lead this strategy, can make a big difference in its ability to navigate the large volumes of data available to them.
Of the respondents, only 27 percent said that their company’s data strategy has entirely prepared it to meet the current challenges and opportunities in the market.
However, 72 percent said that their data strategy has prepared the company either ‘somewhat’ or ‘adequately’ well, and only 2 percent said they are not well prepared at all.
The majority, 80 percent, said they have a central leader for their data strategy.
Of those, the majority said that the responsibility for setting the data lies at c-level, however it is split between technology leaders, investment strategy leaders, and the c-level group as a whole. This, the report said, is because application of data analytics is spread across the whole organisation.
The survey suggested that those respondents in organisations that have their data strategy decided at c-level generally have access to all the data they need. Some 69 percent also said their strategy is at least ‘adequately’ able to meet the current challenges and opportunities, compared to 57 percent that do not have c-level leadership for their data strategy.
With regards to flexibility, the survey found that companies that have a ‘mostly’ or ‘entirely’ flexible data strategy generally capture more value from their data.
Of those that said their data strategy is flexible, 67 percent said they capture data ‘fairly or entirely well’. On the other hand, of those that said their data strategy is ‘somewhat or not at all’ flexible, only 41 percent said they capture data fairly or entirely well.
That said, in total, more than 80 percent said that they are not able to extract full value from the data at their disposal.
The survey report said: “The survey participants believe they have been broadly successful in using the deluge of data to meet regulatory requirements, improve their investment strategies and meet new business objectives. Moreover, many expect to achieve higher return on data investment over the next three years.”
“Yet a surprising number—more than four out of five—say they are not yet able to extract full value from the data they acquire. Existing data strategies, on average, do not adequately prepare firms to tackle the challenges they face, and many strategies lack the flexibility to respond effectively to the unexpected.”
The report concluded that dealing with data challenges requires strong leadership and processes for managing data on an enterprise-wide basis, with more focus on extracting insights to improve business decisions within asset managers.
“They must remain both flexible and adaptable, continuously evaluating performance as methods change to ensure that they are capturing full value from data,” the report said.
“The insights these firms gain from data analytics will be critical to optimising business strategy in an extremely dynamic and heavily-regulated market.”
The survey was conducted in September 2015, and included 201 asset and insurance management executives, approximately half of whom deal with assets exceeding $5 billion. Respondents were split between the US and Europe, and about 15 percent were based in the UK.
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