A new BNY Mellon white paper – Big Data and Investment Management – shines a light on the transformative role Big Data can play in the current era of shrinking margins and ever-more sophisticated and powerful analytical tools.
As Daron Pearce, global investment manager segment head for Investment Services at BNY Mellon, notes, the lines between the front, middle and back office are continuing to blur. As a result, smarter data management is essential for effective fund management.
“Big Data facilitates that – but also poses challenges,” Pearce says. “Through an understanding of these opportunities and potential obstacles, the investment management industry can use their own data to design, manufacture and market solutions more effectively with a view to generating outcomes that are more aligned to investor expectations.”
B2C businesses have already embraced Big Data, developing sophisticated, data-driven profiling tools that enable tailored services for different client segments. But while client, transactional and portfolio data is collected across the investment management industry for historical, regulatory and analytical purposes, most managers are yet to fully leverage these diverse data pools with a view to identifying key correlations and generating fresh insights.
“That is a particular area of focus for us,” says Mark Gibbons, chief information officer, EMEA at BNY Mellon. “Our own Digital Pulse offering, for example, tracks activities, processes and transactions within our company, resulting in predictive analytics that enable businesses to work smarter and drive improvement.”
The new paper highlights how custodians, depositary banks and administrators are positioned at the forefront of product development around Big Data solutions that address the complex – and commercially critical issues – of how to enhance both sales performance and client satisfaction.
It also examines how investment managers can utilize Big Data to bring together separate elements – dark pools of data, predictive analysis, behavioral finance – to allow the investment industry to enhance product design, drive sales and improve investor outcomes.