Data quality, consistency, availability and accessibility stand as the enduring challenges of data management. But today’s business environment is heightening all of these for institutional investors as a result of the widely varied demands of agents, including compliance officers, accountants and risk managers, as well as the operational requirements of portfolio management and trade processing systems. New issues, such as rising data volumes and the need to manage alternatives and unstructured data sources, add to the challenge. The combined impact of such a complex web of demands makes the goal of a single source of truth as elusive as ever.
Institutional investors are demanding more timely, transparent and credible data for their investment decision cycles. We have found that many of our largest asset owner clients subscribe to multiple asset servicing and technology firms. This multi-provider model is useful for diversification of risk exposure, but creates challenges from a data aggregation perspective. The concept of creating a single data source, which standardizes and stores data from multiple providers to carry out instant, informed and intelligent activities, is gaining importance.
To help address those needs, our Data and Analytics Solutions business has expanded our leading capabilities in this area, providing data-driven, modular solutions that enable clients to simplify and modify their businesses, as well as serve their own clients more effectively. Data and Analytics Solutions offers access to an ecosystem of proprietary and third-party business applications to help firms manage their core investment process and beyond.
As unstructured data becomes mainstream, non-traditional/ unstructured data will increasingly be combined with traditional data sources. And the easy availability of diverse, high-quality data will create the expectation that data will be the basis for all decision-making in financial institutions.
The foundation for reliance on this data will be the data quality metrics available to end-users, including details on its sources and veracity. Supporting APIs will include data payloads, metadata and data confidence indicators.
With access to broader datasets, end-users will expect extensible data platforms that are highly configurable to create differentiation.
Significant progress will be made in user friendliness, predicting next moves and minimizing options through constantly improving learning loops. Users will expect to be able to access and experiment with data without being beholden to technology, while still maintaining the required governance. Advances in physical and behavioral biometrics and cybersecurity technology will lead to the development of advanced predictive models, thereby enhancing user experience for end-clients.
Machine learning and other automated approaches to identify data, when enriched and combined with other data, will make it highly valuable in decision-making. This will lead to a dramatic increase in systems exchanging data in an automated fashion across industry participants.
The pace of innovation in data management applications will accelerate as data science labs proliferate and a culture of cooperation between AI communities spreads.
Institutional investors will expect continuous flows of enhancements and innovations that will be best served through open data ecosystems. Research systems will align with traditional mid- and back-office platforms to leverage new sources of insights.
Sharing data across geographical boundaries will heighten compliance considerations and hasten convergence with global standards. Existing frameworks in place for retail individuals will likely be extended to institutional users.
Institutions are expected to accept these more formal data usage frameworks in order to gain access to broader datasets.
Industry bodies and regulators are also likely to endorse these changes in an effort to further promote open financial systems.
Global Head of Client Coverage and Head of Americas, Asset Servicing
Head of Asset Servicing, Asia Pacific