Group Co.
State Street Report Examines How Buy-Side Manage Data and Analytics
Traders Magazine Online News, May 16, 2018
Its all about data and analytics these days.
How should the buy-side investors collect, collate and manage data can determine how much alpha they can capture and profitability. Data can ultimately decide survival – from the portfolio manager to the trader to ultimately the firm. State Street commissioned a report on how these firms conduct the business of data and analytics management and the results are interesting.
State Street commissioned PollRight* to conduct a survey of sophisticated investors on their views on how their institutions managed data and analytics. PollRight – the in-house research department at Citigate Dewe Rogerson – is a market research agency specializing in business-to-business research. It has been at the forefront of research-led PR for over 20 years, encompassing bespoke business omnibus surveying, desk research and analysis and data visualization.
The countries/ territories covered include the UK, US, Europe, Central & South America, Middle East and Asia. The respondents to the survey comprised of institutional and alternative investors operating in sectors such as hedge funds, real estate and private equity. In total, 86 individuals participated
Summary of Findings
• More than half (52%) of the institutions we surveyed have an in-house data management function. This is followed by 31% who split their data management between in-house and outsourced, while 16% fully outsource their data management
• Of the institutions who manage their data in-house, 31% plan to start outsourcing over the coming three years, while 69% plan to continue managing all components in-house. Overall, one in seven (15%) institutions plan to become fully outsourced over the next three years, although more than one third (36%) still plan to manage all of their data in-house
• 54% of institutions currently use multiple data tools for different business requirements, compared to 44% who maintain a central data repository for all data-consuming functions. Respondents said their biggest challenges with investment data and analytics are a lack of integration between different data sources and types (43%), increased volume of data (39%), accuracy of data (36%) and timeliness of data (33%)
• Over half (54%) of institutions rely predominantly on external providers for analytics, compared to a quarter (26%) who rely mostly on in-house, proprietary tools
• More than two-thirds (68%) of the institutions we surveyed are extremely or moderately comfortable with storing their data on the cloud.
• Nearly three-fifths (57%) of institutions say that regulatory changes have driven their firms to make major technological investments over the past five years, while 46% say that the implementation of a better data strategy has improved the alignment between their investment and risk teams. More than one-fifth (22%) say that data and analytics capabilities have become one of their most important competitive advantages
• 43% of institutions expect to rely more heavily on external providers for performance and risk analytics over the next five years, while a quarter (25%) expect to rely more on in-house proprietary tools. One third (32%) expect to make no changes to their current model in that timeframe
• When asked about the factors that are most likely to require changes to the way institutions manage investment data over the next five years, the most common views were increased demands from regulators (57%), increased demands from investors (32%) more stringent risk management standards (27%) and expansion into new asset classes (25%)
• One in eight (12%) institutions believes that they currently have all the right talent in place to advance their data strategy. However, 48% admit that some knowledge and training gaps exist, and 23% claim that significant gaps exist. A further 5% of firms believe that they do not have the right talent in place, meaning that 77% of firms have work to do to improve their data strategy
• Nearly two in five firms (37%) believe that incorporating new tools and methodologies to build and manage portfolios will be the strongest opportunity to raise assets for their firm in the coming five years.
For the entire survey, please click here:
http://www.statestreet.com/content/dam/statestreet/documents/Articles/DataGXResearchResults.pdf
For more information on related topics, visit the following channels:
Comments (0)