Report “Managing data - a necessity and an opportunity”, the third edition in the “What’s next for funds?” series
Investors and fund distributors alike are demanding more data. With standardisation of fund data remaining a key issue, the promise of “big data for funds” seems hard to obtain. This survey-based report, the third in a series produced in association with Funds Europe, asks if this promise will ever be realised. Many products have similar characteristics, but, as of today, the data about them that is given by fund managers to distributors and investors is not standardised.
Key survey findings include:
- The biggest challenge preventing standardisation of this data is that fund companies do not have an incentive to change
- 72% believe fund companies should be careful about how much customer-level data they receive, because each piece of data incurs regulatory responsibilities
- 61% do not believe asset managers have enough data about their distribution supply chain to ensure there is no mis-selling under the second Markets in Financial Instruments Directive (MiFID II)
- 63% believe fund managers will outsource their data requirements in future
This survey has revealed that data management at fund companies is an increasingly important function, both for regulatory reasons and to steer distribution efforts. A large number of respondents were concerned that standardisation is hard to achieve. They also indicated a lack of awareness of some of the main initiatives in this area. As owning customer data can itself be a costly matter, it is not difficult to see why many fund manufacturers would be keen to offload their data responsibilities to distributors or service providers.
Philippe Seyll, Co-CEO at Clearstream Banking S.A. stated: “As a fund custodian, Clearstream delivers state of the art solutions to standardise fund processing and to increase transparency throughout the investment funds processing chain. With the recent acquisition of the Swisscanto Fund Centre platform and the link to the new business segment, asset managers, we will gain access to more data and the required expertise to support distributors with truly value-added services in the fund intermediation space.“
Growing need for data and transparency
Centralised solutions, such as Vestima, can serve the growing need for data, transparency along the fund processing chain, and specific KYC/AML tasks, thereby supporting distributor banks in complying with new regulatory challenges, such as MiFID II.