Investment Data Management – 2021 Year in Review
2021, like 2020, threw up many challenges in all walks of life. In relation to Investment Data Management, especially in the first half of 2020, the industry was primarily concerned with achieving a “business as usual” state through all the challenges that isolation and remote working brought about due to COVID. But these challenges did bring focus to the benefits of centralised data management solutions, with less moving parts. Data literacy and democratisation become more important than ever and will continue to play a major role in data requirements.
2021 was back to normal to a large extent with organisations looking for data management capability uplift. Whilst some of the following trends and discussions have gone on for several years there was more focus on these in 2021.
The Rise and Rise of ESG Capability
This one won’t surprise anyone. ESG focus, articles, conferences and roles within organisations grew dramatically throughout the year.
CDSL saw a number of clients looking to CuriumEDM to deliver ESG integration, data mastering and helping to meet their SFDR reporting requirements. These projects look to continue apace in 2022.
Whole of Portfolio View
Whilst this has always been an important topic, it gained momentum in 2021. ESG and support for alternate investment types have added to the complexity of Whole of Portfolio view. As part of this view, capabilities required include:
- Support for all asset types
- ESG – which is referenced previously
- Full look-through and analytics over a fully resolved look-through view of investment holdings. This requires:
- Asset structure
- Granularity of constituent data constructed from top-down fund of fund and parent/constituent structures
- Multiple aggregation views from bottom-up to required levels of asset classifications
- Data capability that is agile, with the handling of increasingly diversified and complex data sets being required
CuriumEDM’s flexibility with existing investment look-through for, often complex, fund of fund structures ensures CDSL can continue to satisfy this requirement.
Cloud Adoption/Migration Continues
This wasn’t the “buzz” that it has been in recent years, but it has become an accepted principle that Cloud capable solutions are now just part of the ‘target state architecture’. An associated term that was used in many of the conferences was “interoperability”. Solutions don’t have to co-reside, but they must be interoperable.
CuriumEDM continues to support Cloud implementations either through the client’s preferred hosting environment, CDSL’s own hosting partner, Cloud Direct, and via the many interoperable capabilities within the solution.
Data Outsourcing vs Insourcing
This topic was perhaps one that got more varied responses, depending on the speaker/organisation. Many organisations are of the opinion that Data Management is not their core business or competency so it should be outsourced as much as possible. Others argued that there is the potential for organisations to provide their own competitive advantage by doing much of the data management themselves.
This discussion also needs to incorporate organisational scale as a factor. Smaller organisations cannot necessarily afford to develop and support state of the art data management regimes. Larger organisations on the other hand can, and should, develop their own capability. Key factors include:
- Flexibility and speed to market
- Ability for an organisation to differentiate itself from others with its data capability
- A sometimes misguided belief that organisations can outsource responsibility for data quality with limited or no oversight
CuriumEDM continues to adapt to support outsourced models but can also provide a highly capable environment for building your own integration, DQM, MDM, BI and data governance if that is your preference. This provides the best of both worlds as CDSL can provide a solution for both small and large organisations.
Within Australia, fund mergers have been picking up momentum for several years. This increased even further in 2021. In part, this is because organisations are trying to achieve scale, whether for efficiency reasons or protection against being taken over by a larger fund. However, APRA has also been vocal in their preference that fewer and larger funds would better service the Australian market.
This trend provides an interesting inflexion point to the topic of insourcing vs. outsourcing as organisations scale.
In 2019 CuriumEDM was key to what was (and perhaps still is), the largest super fund Custodian transition in Australia, based on FUM. This year one of CDSL’s clients will have the largest change in FUM for a merged super fund entity (about AUD$85 billion change). Key to this is flexibility and ability to consume, quality check and master data from multiple data sources, as well as providing the requisite daily controls and dashboards for the investment operations teams.
Analytics, Machine Learning and Artificial Intelligence
Whilst this was in the conversation in a number of conferences throughout 2021, it didn’t seem to accelerate in terms of focus and adoption in the way many may have thought.
CuriumEDM continues to support these processes by helping ensure that data is of the best possible quality and in the most consumable form. As well as providing key investment analytics specific capability.
Data Quality is Still Key – and Still a Major Challenge
Regardless of whether your main focus was on ESG, outsourcing, fund mergers, gaining whole of portfolio view or improving analytics, the basic tenet of data quality was reiterated many times throughout the year. After all, garbage in, garbage out.
CuriumEDM was first developed as a Data Quality Management solution and its capabilities are exceptionally mature, robust and proven through many global organisations, with combined FUM around USD 2 trillion, over a decade of implementations. CuriumDQM is the data quality process control solution used by all CDSL’s clients on a daily basis. CDSL believes it has the best capability in the market and no one has disagreed with us to date!
If you are looking to improve your data capability in 2022 and beyond, please do not hesitate to get in touch.
Enter your details to receive regular blog updates
Get in touch
If you would like further information or have any queries about Curium please do get in touch. One of our team will be straight back to you.