Excerpt from EY Wealth & Asset Management viewpoint.
Joined-up data is increasingly crucial to creating shareholder value
With the benefit of hindsight, it is easy to see why data has had such a meteoric rise up the agenda of asset managers’ executive teams. The explosion in the volume and speed of data accumulation across the industry – and the interest in developing new analytic capabilities to make sense of that data – has been phenomenal.
Data and analytics are already being used in activities as diverse as client segmentation, investment research, risk management and fraud prevention. Boards are beginning to realize that joined-up data is essential to achieving core shareholder value objectives such as cost reduction, revenue growth, investor satisfaction and, of course, total shareholder return. An effective data strategy is also recognized as crucial to meeting the challenges of digital distribution, enabling asset managers to distribute their products directly to their investors online. The emergence of robo-advisors, the growing power and diversity of Financial Technology (FinTech) and technology giants’ interest in asset management are focusing the minds of established firms on the need to deliver radically-different customer experiences in future, especially to younger investors.
Above all, though, Executive teams are aware that compliance with a range of regulatory requirements will be reliant on data management. Dodd- Frank, FATCA, MiFID II, PRIIPs (Packaged retail and insurance- based investment products) and others call for asset managers to provide regulators with ever more detailed, timely and granular data. Addressing these overlapping requirements is the greatest single driver of firms’ need for effective joined-up data. This in turn is creating a broader awareness that reliable, centralized data management systems and processes can help Boards achieve many of their strategic objectives.
A Board-level issue
Vision, drive and support at Board and C-suite level are essential to achieving buy-in from all functions and business units, and to confirming that the approach is implemented fully and successfully. This includes creating an information management framework for the whole organization covering data governance, quality, usage, management and architecture. Otherwise, weak links in the chain will develop and firms will struggle to extract full value from their investments. Board-level commitment is also vital to fostering a culture which recognizes the value of data management and prioritizes accordingly.
In short, joined-up data is not a concern for one function or department. It needs to be identified as a Board-level priority. Executive teams can then set a holistic data strategy supported by an extensible technology architecture which realizes the value of a truly data-driven enterprise.
EY Legal Services Contacts:
Peter Katko – Global Digital Law Leader
Fabrice Naftalski – Global Data Privacy Leader