Data management continues to be a priority for IT and Operations at most investment firms. As evidence of its importance, over the past three years CutterResearch™ members (135 firms that collectively manage over $20 trillion) have voted for topics that will assist them with data management including:

Many firms thought IT and systems would solve data problems. Most have discovered that, although systems can assist with data management, there is an imperative to have a comprehensive data management strategy that involves the entire organization. Cutter’s current research on data identifies the key factors in the development and implementation of a successful data management strategy.

The drivers that make data management so critical are the investment, client and operations risks posed by poor data quality, the lack of data transparency, and lack of integration. Cutter expects that data management initiatives will receive further impetus from regulations, given the data requirements inherent in the SEC’s best-execution requirements and in MiFID.

Nearly all investment management firms are striving toward the ideal – business-driven data management. IT departments are urgently trying to get their businesses to understand that data management is not just an IT problem; firms require broad cross-functional teams to effectively address data issues.

IT departments have enhanced project governance to include strong data management standards. Leading asset management firms are increasingly finding that systems should be implemented after a careful evaluation of data sources, redundancies with data in other systems, and full reconciliation with data from other sources.

Not surprisingly, data management at many firms is still in its infancy. Although more than half of large investment management firms surveyed have data warehouses or data hubs, many warehouses and hubs are used in a limited way. However, most firms have plans for expanding the scope of their warehouses or hubs. Another indication of the immaturity of data management is that only a handful of firms have metrics that allow them to manage data quality and objectively evaluate their vendors.

T managers have had to juggle contradictory charters – to develop a data strategy which addresses data management issues throughout their entire systems architecture, while continuing to develop and support system functionality. Leading firms have recognized that IT alone cannot drive data strategy. They have established formal organizational roles and rules around data management that include input and responsibility from investment professionals, operations personnel, compliance, finance and client management. Finally, more and more firms have established the position of ‘Data Czar’ to manage the entire data management effort.