Fiona Horsewill, Head of Data at Citi Securities Services, discusses the fundamentals of creating a successful data strategy, some of the challenges to look out for, as well as how service providers can play a key role helping asset managers create a data-centric culture.
What are the key components to building a successful data strategy?
A modern platform architecture is a key enabler to the realization of an organization’s data strategy. It enables firms to innovate faster, better service clients and deepen relationships, more effectively manage risk, and increase shareholder value. However, architecture alone cannot deliver a data strategy. To be successful, firms should employ three core principles: understanding, organization, and culture.
A critical first step in formulating a data strategy is understanding. It is important to understand the outcome you are looking to achieve and to analyze your data components and the role they play in achieving this outcome. This understanding will be the foundation of your strategic framework that will drive the roadmap to building your data program.
Once the framework is in place, it is important to organize your data so that it becomes an organizational asset that can be accessed across your organization’s ecosystem. Without proper structuring and deployment, the depth and benefits of your data strategy are doomed to not meet expectations.
Finally, culture is a crucial element to the successful execution of a data strategy, yet is often overlooked. By implementing a data-centric culture, you can drive accountability and collaboration. In a data-centric culture everyone in the organization understands the importance of data and their role in ensuring its accuracy. Additionally, everyone is empowered to think about how to unlock the value of data embedded in processes. This is when the magic can truly happen― client behaviors can be uncovered, new product lines discovered, and true internal operational benefits can be realized.
What are the challenges asset managers face with their data strategy? What common pitfall should they look to avoid?
One of the biggest challenges for asset managers is getting their arms around all their data. Many asset managers have a plethora of systems to support their business which have grown over time, either through acquisition or because of a best-of-breed approach to utilize multiple systems and software components. Integrating these applications, and mapping the data, can be a convoluted and costly experience. Investment is required to simplify the connectivity and move to a more sustainable way of interrogating data.
Where firms often misstep is starting this process without a clear framework, which can often lead to biting off more than they can chew. If firms have a clear framework, they can prioritize better and focus on ensuring the right investment in technology, people, and processes are in place. Firms are most successful when benefits are delivered to stakeholders in an incremental manner, rather than a big bang approach.
What is the biggest driver of data and digitization in asset management? Where do you see the biggest opportunity for asset managers to leverage data?
Cost is a major factor in digitization ― both from the perspective of trying to reduce the cost of maintaining current platforms, as well as the opportunity cost of not having the right data and analytics available for decision-making purposes.
Beyond cost considerations, enhancing the investment process has also driven the increased requirement for data, across all dimensions ― from ESG to consumer patterns, to other macroeconomic and geopolitical indicators.
Lastly, and very importantly, a digital strategy is becoming increasingly important to winning and retaining clients. Improving the client experience through digitization is probably one of the biggest opportunities for asset managers. Being able to deliver better analytics and insights to clients with precision timing can add real value to clients.
What role do services providers play in asset managers’ data strategies?
Service providers can aid asset managers by providing scalable platforms with digitized processes which ensures the accuracy and granularity of the data being delivered. Service providers can also integrate their data models, processes, and platforms to support asset manager processes. This includes sourcing, storing, and delivering data to asset managers that allows them to add their own insights to the data.
Some service providers such as Citi, can also provide data sets to further enhance the investment process, such that analytics can easily be overlaid by the asset managers and data combined across the transaction lifecycle to derive further insights. Finally, asset managers who can build a strategic partnership with their securities services provider can also benefit from the investment of that provider and focus their own investment where it delivers the most benefit to their organization. For example, leveraging access to digital assets and ecosystems and other emerging asset classes and technologies.
Ultimately, part of building a data-centric culture is ensuring that you work with data-centric service providers that understand and support your intended outcomes