Asia Pacific Asset Managers Reassess Data Management

Increased complexity, driven by changes to reporting requirements, requires a new approach to data management for Asia Pacific’s asset managers and servicers, suggests a survey.

‘The Global Asset Management Study 2014’, a collaboration between software group SunGard and research and advisory firm Aite, canvasses opinion from 58 asset managers and servicers globally, including in Asia Pacific, to discuss their challenges in middle- and back-office operations.

Nearly half of the responding firms have operational sites in Asia Pacific and 19% of them are headquartered in the region. According to the survey findings, the key challenges that lie ahead for the firms include the following:

• Impact of business diversification: The survey found that moving from a country-level to a global approach is important for 78% of firms, which see better support for their global client base as a critical operational goal over the next 12 to 18 months. However, expanding globally into new geographies can also introduce operational complexities. The top business challenge today, for 68% of respondents, includes ‘increasing regulation and the challenges of aggregating data.’
• Operational inefficiency: The survey reveals that ‘enhanced operational controls’ and ‘increased efficiency through automation’ are the two most important goals for firms’ middle- and back-office operations, for 83% and 81% of firms respectively.
• Increased pressure to leverage data: Asset managers and servicers clearly recognise the growing importance of data management. The survey determined that 62% of firms have cited ‘better support for data aggregation’ as a major goal of their middle to back-office operations over the next 12 to 18 months. This need is being predominantly driven by risk management, named as the most demanding source of back-office data requirements and analysis.

Commenting on the challenges for Asia’s asset managers and servicers, Virginie O’Shea, senior analyst with Aite Group, said that Asian firms face many of the same pressures as their peers around the globe – the pressure to diversify and support globalisation. However, there are differences in maturity levels between Asia and the US/Europe.

She adds that the emerging Asian markets tend to be at an earlier stage in terms of structuring data management. The function often sits under IT with less input from the business – versus a more holistic and integrated approach in more developed markets. There are also more regional or country-level focused data programs in Asia, while the European and North American firms are often more global focused.

Denise Valentine, senior analyst at Aite Group, added: “As the details of regulation continue to be fleshed out and new requirements take effect, the resources of most asset managers and servicers are still consumed by compliance. But many firms who put technology purchases on hold during the financial crisis are now resuming enhancements to their fund accounting systems and associated middle- and back-office solutions, with the desire to become more efficient, automated, accurate and service-oriented.

“Given the many changes to market and industry infrastructure in recent years, it is hardly surprising that organsations are still grappling with core operational issues. The improvement of efficiency and automation is an ongoing process that, as challenges continue and new lessons are learned, will need to constantly evolve.”

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