The current market trends indicate that capital markets firms are under massive pressure to make the most judicious business and investment decisions possible. The effectiveness of such decisions particularly depends on the data underpinning them.
A research released by Waters Technology and MarkLogic Corporation reveals that nearly two-thirds of financial services firms struggle to store, access and share data. More than 50 percent are considering single data hubs to foster their ability to make data-driven investment and business decisions. Waters Technology is a leading financial market technology information provider, and MarkLogic Corporation is a next generation data platform provider for simplifying data integration. The report clearly indicates that capital markets firms are not taking full advantage of their research data, due to inefficient and ineffective data management techniques, processes and procedures.
The report is based on the survey conducted among nearly 104 firms including investment banks, asset managers and broker-dealers across Europe, North America and APAC. The report underscores the vast challenges and opportunities for financial services firms to better use data to boost investment returns, improve operational efficiencies and more easily meet regulatory reporting requirements.
According to the report, 56 percent of firms are considering a single investment research “hub” to store all research and ancillary information to tackle data related issues. Around 2/3rd of these firms affirmed that one single hub will enable them to make better investment decisions. Also 59 percent expect it to enhance the client experience through personalized research.
The research report named ‘Investment Data Practices Under the Spotlight’, highlights following:
• Among the surveyed firms 64 percent of respondents believe that the research data of their company is stored in too many disparate systems or locations across the enterprise.
• Nearly 66 percent of firms are not able to access all their core investment data in a single location.
• Around 72 percent of respondents stated that they do not have tools to create personalized, authoritative research for clients in time subsequently hindering the client experience.
• On an aggregate, 50 percent of the firms consider that a single data hub will help them streamline processes around storing and curating investment research.
Giles Nelson, Chief Technology Officer, Financial Services at MarkLogic said – “For any buy-side firm that wants to make the best possible investment decisions, having data at their fingertips is critical. It’s also important to regulators that firms understand how a conclusion was derived, which means they’re able to track data lineage to justify decisions— not only to regulators but to investors or other key stakeholders. This is not about getting every decision right and proving your case, it’s about showing there’s a process, and you have data to support decisions.”
• Additionally, 69 percent of the surveyed firms believe that building the case for investment in a data hub around improved operational efficiencies will enable them secure the funds.
• On the other hand, 49 percent believe the business case for an improvement in investment decisions that help them achieve alpha is also key.