As asset managers continue to look for ways to fully capitalise on data, a new SIX report has found that almost half view data velocity as the key challenge in enabling analytics to drive growth.
This is more than the number which highlighted volume, or even variety, of data as the key challenges.
For fund managers, data velocity – specifically the speed at which data is generated, collected, and distributed – is one of the key considerations in large part because of the fast-moving nature of the area in which they operate.
SIX explained: “Given that asset managers invest in and distribute products from a broad array of fast-moving asset classes, access to near real-time market and reference data can make the difference between outperforming or underperforming the benchmark.”
While asset managers were concerned with slow data delivery, 41% of investment banks highlighted limited variety when it came to the data they are able to consume, and the same percentage of wealth managers confirmed that for them volume was the primary consideration.
Overall, the 2023 future of finance study found that while most companies are “generally confident” around evolving data and analytics, all agree there is space for improvement in terms of their own data supply chains.
Looking at the specifics of where data is set to facilitate development, 48% of executives confirmed that they expect emerging data analytics to be of most benefit in ‘trading, investment analysis and portfolio management’ within their businesses over the next five years. This focus on front-office was further shown by 46% of respondents highlighting ‘sales and distribution’.
Elsewhere, the report found that AI came out on top as the biggest enabler to organisational growth with 38% highlighting it, while ‘high quality data’ and ‘analytics capabilities and alternative asset classes (such as digital assets, private markets, infrastructure)’ were both recognised by 35% of respondents.
Berta Ares Lomban, head program and innovation office, financial information at SIX, said: “A deep understanding of data underpins AI’s potential to deliver accurate and valuable insights. In the data-intensive world of capital markets, this attention to detail becomes a powerful asset, where precision in data handling can have a significant and positive impact when AI is deployed at scale.”
The report found that for those companies focused on AI, quicker and increasingly accurate data analysis (for better decision making) is the area set to deliver the most client value.
While 55% of respondents shared this view, overall, the asset management individuals were most in favour, chosen by 58% of those surveyed.
Shai Popat, head of product and commercial strategy, financial information at SIX, discussed the future outlook for the market, asserting that data is only set to be increasingly important: “To effectively gain a competitive edge in a data-driven world, firms require a combination of advanced technology, data management practices, regulatory compliance, and a deep understanding of the financial domain. Indeed, data and analytical capabilities have never been so strategically important.
“While different industries face very different challenges with regards to their data, ease of access and the ability to analyse and derive insights from data will be of paramount importance to all players over the coming years. Without this, companies risk failing to remain competitive in an increasingly data-dependent landscape.”
The research from SIX was based on responses from 343 C-suite executives from Europe, North America and Asia. These individuals work across financial institutions, asset managers, wealth managers, investment banks, and asset servicers.