The Case for Buying a Risk & Analytics System for Investment Data Integration / Management

Case in Point:  Barclays POINT Data Migration Deadline ~ approaching.

Investment data integration / management has never been more critical, moreover data requirements at asset management companies are skyrocketing.  Cutter Associates notes “as investment managers take on more specialty assets, clients demand better and faster reporting, and regulators pile up demands for transparency and for information of every type.” Some don’t foresee a time when data demands, expectations, or requirements will stop growing or even slow down.  Thus the build vs. buy solution decision — to integrate and manage new competitive data products and assets — is pivotal.

The Build Solution

When asset management firms deploy new systems, they have typically developed a new data integration solution internally.  This has been driven by tight deadlines, limited budget, available resources and business ‘attention’ to the delivery of the overall project.  This creates a series of ‘quick wins’ which satisfies the headline business priorities of the day but the cumulative effect of these internal patches creates an operational data management function that is:

• Highly manual
• Costly to maintain
• Prone to error
• Difficult to leverage and
• Impossible to scale’

How have your recent data solution builds faired?

1. Was the project completed in a timely basis, on or close to budget?
2. Was the right functionality achieved; is it competitive with buy solutions or were there compromises made?
3. Was the solution well-tested prior to and during deployment?
4. Was the system architecture well-documented such that if persons  
   involved “move on” it can be supported by new resources
5. Was the system budgeted and staffed for ongoing maintenance, support and upgrades

A major reason for failure of internally built data solutions is simply a lack of experience, depth, and breadth of knowledge in the specialized technology field in which a solution is intended to satisfy.

Data as a Strategic Asset

Consider the stakes of achieving high data quality integration: it facilitates superior investment decisions, delivers timely and accurate reports to clients, improves operational efficiencies, and mitigate risks.  

The Buy Solution

Risk & Analytics Systems Data Integration

Most of today’s Risk & Analytics Systems ‘RAS’ housed at asset management firms have data integration solutions that were built internally and some many years agao. Timely case in point: Barclays POINT. They were purpose-built to meet specific requirements at a point in time. It made sense then. Vendor solutions in this space did not exist. Vendor solutions in this space exist now.

Business is dynamic. Requirements change as new instrument types are purchased, new funds are launched, new strategies are developed, unplanned acquisitions & divestments occur, and new systems need to be incorporated into the overall infrastructure or partially outsourced as the case can be.

The fact is internally built data integration solutions quickly age and become unfit for purpose — don’t deliver quality data to make superior, timely and accurate investment decisions or effect operational efficiencies and risk mitigation.

The upshot, a solution is needed that can keep up with the dynamics of the business and systems landscape. Perhaps you recall when you used to build your own trading or portfolio accounting platform. You don’t do that anymore, you buy one.

Today, vendor based solutions cost less to maintain, offer continual maintenance and upgrades, and significantly reduce operational risk & costs.

The time is now for a RAS Data Integration Highway. Why?

1. Reallocate your talented IT resources on new value-add and proprietary initiatives adding to bottom-line.
2. Ensure your software is up-to-date as RAS vendors update their systems or as you migrate to new RAS systems (e.g. POINT transition in light of Bloomberg August deadline).
3. Reduce your operational risk by eliminating the plethora of manual operational process post upload/feed.
4. Maximize the use and data quality of your RAS systems from a portfolio modeling, risk management and client reporting perspective

Vendor solutions provide a scalable operational infrastructure that reduces operational risk & costs and frees resources for your high value initiatives.

Schedule a consultation to learn more about the KTier™ intelligent investment data highway solution and RAS connectors.

This post, originally published on 5/6/16, has been updated and expanded in this post.