By Bruce Russell
Investment managers are making a lot of progress with investment data management. There is a significant investment in tools and infrastructure and most organisations have a strategic goal to improve the quality of investment data management on the belief that this will drive better investment outcomes.
But is this true? Are we on the cusp of unlocking new investment capabilities that leverages greater insight into our data or are we trying to find a solution for a problem that doesn’t exist?
Recently Shoreline Consulting hosted a series of industry roundtables with leading investment organisations to explore this issue. Here are some of the insights from these discussions:
But we are not out of the woods yet...
Even though we have made a lot of progress, there is still the risk of the 'white elephant' solution. Front office teams are often relatively dis-interested stakeholders and many haven’t yet changed their investment processes to benefit from greater availability and quality of investment data. To avoid this ‘white elephant’ risk, we believe that some essential steps are needed to ensure organisations get the full value from improved investment data management. In short…is it time for Investment Data Management (IDM) 2.0?
What is IDM 2.0?
IDM 2.0 refers to completing the ‘last mile’ of an investment data management project. IDM 2.0 builds on the foundation of earlier data management projects that were primarily focused on improving the operational management of investment data, by specifically focusing on providing investment teams with the right data at the right time to help them make better investment decisions. Some important characteristics of IDM 2.0:
We are at a cross-road when it comes to investment data management. There has been a lot of good progress and we are finally getting the foundation right. However, success can only be achieved when this new capability is contributing to better investment decisions. Otherwise, investment data management may indeed be remembered as the ultimate solution that never actually found its problem to solve.
Bruce Russell is director at Shoreline Asset and Wealth Consultants. He will be speaking on this topic at the 3rd Investment Data & Technology Summit on August 14 at the Westin Sydney. The agenda is here.
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