New survey from State Street highlights importance of data in transforming global finance
Asset owners and managers in the Asia Pacific (APAC) region expect to boost their data and analytics capabilities in the next three years according to a global survey by State Street Corporation (NYSE:STT).
The survey, titled “The Innovator’s Journey: Pathways to Data Dexterity” and conducted by Longitude Research, polled 400 senior executives at asset owners and managers in 11 countries. Of these, 130 were based in APAC including Australia, China, Hong Kong and Singapore.
The vast majority (81 percent) of global respondents describes data and analytics as one of their top strategic priorities, and 72 percent plan to invest more in their data management systems over the next three years. Drivers of these changes include not only increased regulation but also a push by institutions into new asset classes and regions, and greater demands from clients and investors.
The survey reveals that while more than three quarters (77 percent) of APAC respondents see data and analytics as either their most strategic or very high level priority, more than half (55 percent) say that their data capabilities would struggle to cope with an expected increase in regulatory requirements.
This reflects the view of a large percentage of global respondents who say they do not have total confidence in their ability to generate forward-looking insights, evaluate risk and performance and stress-test their portfolios.
State Street has identified three key groups at different stages of data innovation globally. Data Starters (27 percent), who are burdened by legacy IT and compliance issues and out-dated systems; Data Movers (36 percent), who are investing at a faster rate but may still face issues gaining an accurate view of portfolio risk; and Data Innovators (37 percent), who recognise the value of data and analytics and are confident about the competitive edge it brings.
“Investors now face many disruptive trends with the emergence of new multi-asset investment strategies, the opportunities created by globalisation and a rising tide of regulation,” said Jessica Donohue, chief innovation officer and head of Advisory Solutions at State Street Global Exchange (SSGX). “Advanced data tools and practices will be one of the most powerful agents of change in the investment industry over the next decade. The big question institutions need to ask themselves is where they are on that journey to what we call ‘data dexterity,’ are they a starter, mover or innovator? It’s no longer enough to make incremental moves. They need to speed up the process and have a clear vision of how they can extract real value and accurate insights from what is ultimately one of their most strategic assets,” continued Donohue.
About three quarters of global and APAC respondents say they have increased the amount they invest in data and analytics by between five percent and 20 percent each year for the past three years.
The biggest areas of spending for many organizations in the years ahead, according to the survey, will be data governance – having the right policies and controls in place to address data security – and attracting and managing the right data talent.
This is not surprising given that more than three-quarters of survey respondents said the biggest data challenges they face are ensuring the security and accuracy of their data.
The Innovator’s Journey
The findings suggest that asset managers are more confident than asset owners in their data abilities, with 40 percent of global managers considering themselves to be innovators and 23 percent starters as opposed to 34 percent of asset owners who are innovators and 32 percent starters.
Insurers are viewed as progressing to “data mastery,” according to the survey, whereas pension funds are at the early stages of the data journey.
“Staying ahead in a fast-changing market will be as much about cultural change as about adopting new technology,” said Ian Martin, executive vice president and head of Global Markets and Global Exchange for the Asia-Pacific region. “Data innovators who prize data as a strategic asset are investing in it, protecting it and leveraging its value at every level of their organization. Investment organizations need to focus on getting to the point with their data capabilities and building strong foundations to gain a competitive edge in the high-tech investment model of the future.”
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