Thursday, January 9, 2020 Stamford, CT USA — Asset managers seeking an edge in an increasingly competitive market are turning their eyes inside their own organizations to new technologies that allow them to extract more value from investment research and data.
According to new Greenwich Associates data, institutional investors globally spend more than $6.5 billion per year on investment research and the typical manager utilizes over 25 different providers for research services and data. For larger firms that number can easily be double but most buy-side firms do not have a dedicated technology platform to manage and share research. In fact, only a quarter of investment managers participating in a recent study by Greenwich Associates use a formal research management system (RMS).
“In most cases, even among some of the world’s biggest investment firms, investment professionals have to make do with ad-hoc systems built over time by combining basic tools, such as spreadsheets, shared drives, and email applications,” says Kevin McPartland, Head of Research in Greenwich Associates Market Structure and Technology group and author of Research Management Systems: Essential Tools for Modern Investment Management.
That’s hardly an optimal approach and many firms are realizing that traditional tools like spreadsheets and shared drives are no longer sufficient in the highly competitive investment management industry. Asset managers are recognizing that a modern research management process can help streamline idea generation and data procurement, standardize workflows, track consumption, enhance compliance, and improve team collaboration.
Feedback from organizations that have implemented RMS is positive. Among RMS users participating in the study, 54% reported productivity gains and 47% noted improvements in compliance management. Users cite data management and streamlining workflows as top RMS advantages.
“When an investment firm consumes hundreds of different sources of data that can be updated on a daily, monthly or weekly basis, it’s obvious that data management is so central to their operations that it could have an impact on investment performance,” says Kevin McPartland.