Investment firms recognize the value traditional and alternative data play in their decisions.
Today, almost all investment professionals believe alternative data is becoming increasingly important to identifying innovative ideas to boost alpha, according to research by Deloitte.
However, their research also highlights the challenges managing data presents to investment firms.
Deloitte reports most firms are still battling basic tasks like combining data from different sources and processing raw alternative data into a usable format. Integrating the data into a common platform is also challenging, making it difficult for firms to utilize it consistently in the investment decision process.
This is especially difficult for those firms that lack the time, money, infrastructure, or human capital needed to generate an information advantage.
And these challenges are not limited to those using alternative data. Firms face similar challenges in leveraging data of all kinds.
In this blog post, I explore the complexities firms face when incorporating investment data into their operations and highlight how a new technical solution breaks down obstacles and enables firms to fully access the value of investment data.
Insights, Buried by the Process: The Challenge of Investment Data Procurement
Reaping the benefits of investment data today can require firms to work with a wide range of data from a wide range of vendors.
However, incorporating these providers into the investment process can be time-consuming and cumbersome. Firms must vet, onboard, and manage each data provider. In the end, firms spend more time project-managing their data than acting on its insights.
They also face the arduous tasks of data cleaning, enrichment, mapping, validation, and quality control. All these tasks require significant time, expertise, and human resources that are not available at many investment firms.
Cobbled-Together Tools Hinder Effective Use of Investment Data
Unless a firm has the extensive resources necessary to build a technical solution in-house, most resort to patching together solutions to manage investment data.
Here are some examples of disparate technologies I have seen firms pull together:
- Data warehouses that serve as a central repository that ingests all types of internal and external investment data and organizes it for analysis.
- Data libraries or aggregation solutions that allow firms to discover data vendors but often require direct partnerships with each individual partner. Many times, firms interested in procuring alternative data sets are left with one-off sets and a lack of optionality.
- Reporting and visualization platforms that help firms transform data for use in reporting, marketing, and performance illustration.
And the list goes on.
While firms have had a vast range of separate technologies to choose from, they haven’t had a solution that can connect all the dots and provide a 360-degree data experience.
What these firms need is one connected system that can serve as a data warehouse, help with procurement and curation, aggregate internal and external data sets, and transform it to support the investment process.
Cost, Infrastructure, and Talent Demands Render Firms Unable to Adopt True Investment Data Strategies
When analyzing all the components that go into leveraging investment data, it’s clear why many investment firms feel that gaining a data advantage is out of reach.
Firms are not only confronted with the complexity of sourcing and managing multiple data providers, but they also grapple with the intricate tasks of data cleansing and normalization. Additionally, they are expected to become technical experts, harmonizing disparate data systems and processes.
The significant capital required to establish a sustainable data science program further compounds these challenges, especially as firms continue to look to reduce infrastructure costs and shrink their technology footprint with cloud-based solutions and managed applications.
Finally, even if all these pieces can fit together, who is doing the work?
When rolling out data science across the business, firms need people to help, a team of experts who can demonstrate the value of this new program. In a climate of reducing headcount and tighter resources, adding a new team to the payroll is not something many firms are willing to do.
Introducing SS&C Data Lens: Democratizing the Investment Data Experience
Investment data has the potential to be a game changer for firms, giving them a strategic advantage in decision-making and an edge in their quest for alpha.
However, the complexity and resources required to effectively access, manage, and leverage investment data have deprived many firms of the advantages data offers.
Until now.
To help ensure all investment firms can harness the power of data, SS&C created Data Lens.
SS&C Data Lens simplifies investment data with one centralized solution for all firms' data needs, plus managed services to enable users throughout the process. This new solution offers end-to-end data procurement, curation, management, reporting, and analytics and was developed specially to meet the needs of the investment team.
Together, this technology and managed services combination let users unlock the power of data in their investment process without the typical headaches, saving time, reducing costs, providing optionality, and removing the need for additional infrastructure and staff.
Harness the Power of Data Without the Hassle
For more information or to see Data Lens in action, reach out to your SS&C Eze technology account manager or contact us to learn more.
