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April 06, 2016 at 10:36 AM
Asset managers are awash in new data, but few are reaping tangible benefits from their data, according to research findings released this week by Northern Trust.
Only 13% of asset management executives in a new survey said they successfully captured the full value from all of their data. Forty-four percent said they did so fairly well, and 41% somewhat well.
Most asset managers in the survey said the benefits they derived from data were broadly in sync with their most important goals: improving investment decisions, managing risks and modeling or otherwise assessing risks.
As well, they said, growing regulatory demands and the need to improve client satisfaction were motivating them to seek new data.
However, 28% of respondents reported that data inundation made it hard to determine what was useful.
Thirty-six percent of respondents complained that data required significant scrubbing or processing, and 29% said data were presented in noncompatible formats.
Northern Trust said these barriers left most asset management executives with strong reservations about the reliability and utility of their data.
“This survey confirmed for us what we recognize as some of our clients’ biggest challenges,” Pete Cherecwich, Northern Trust’s Americas head of corporate and institutional service, said in a statement.
“Whether they are looking for ways to manage their investment decisions, monitor their risks or improve their reporting, they need to extract more value from their data to gain actionable insights.”
The Economist Intelligence Unit in September polled some 200 American and European asset management and insurance executives involved in decisions regarding data sourcing, management and strategy. About half of respondents worked for managers with more than $5 billion in assets.
