Low staffing levels, lack of senior oversight and budget constraints are all factors holding back asset managers from developing comprehensive data strategies which will help them remain competitive.
The findings from the latest Data Operating Models Study by Alpha FMC, the asset management consultancy, analyse the progress asset managers have made to establish foundations for the effective use of data and data analytics within their businesses.
A study of 33 asset managers with a combined AUM of £6.9 trillion, found that asset managers see big data analytics and artificial intelligence (AI) as critical to improving investment returns, as well as helping them differentiate against competition by enhancing customer experience, ensuring customer retention and, crucially, cutting costs. However, structural barriers, legacy technology and lack of commitment are preventing the industry leveraging data to improve their processes.
Current teams remain small and data capabilities mixed across the sector
The study shows that the number of staff dedicated to data management increases with firm size, but larger firms with over £250bn of AUM are likely to have at least twice as many data staff than small and medium sized firms. However, median team sizes are very small overall; only 1% of total asset management staff have data skills.
These roles sit predominantly in data architecture and integration, followed by data science experts and data engineers. With the exception of large firms with existing staff in data architecture, the size of teams with data expertise across all skillsets are in the single digits across all firms.