At the recent AWS Capital Markets Financial Data Forum, Yugo Ashida, Head of ISS Enterprise Architecture, Fidelity International and Stephen Collie, Co-Founder, FINBOURNE Technology delved into some of the data challenges caused by traditional asset management practices and uncover how FINBOURNE’s Modern Financial Data Stack is enhancing interoperability and driving sustainable growth.

Part 1: Data challenges caused by traditional asset management practices

Asset Managers face challenges on various fronts: how are data obstacles preventing them from operating more efficiently, and keeping up with competition?

Yugo Ashida: There are a number of challenges that Asset Managers encounter today that requires investment data obstacles to be confronted and resolve:

• In a faster-paced world of new data sets and evolution of thinking – especially with ESG – we need to be able to onboard and be able to make use of data quickly.
• Being able to service client solutions, rather than just products, utilizing customised asset allocation models, and facilitating specialised investment strategies that need to be delivered in a scalable and agile manner.
• Responding to business-critical data questions is slower. For example, incorporating alternative data sets on things like real estate investments, and joining that with data on your other holdings to obtain a single view of what you own and how much it’s worth in near real-time is almost impossible.
• Cost pressures start highlighting the inefficiency of the current operating models including the architecture.

These challenges arise as:

• Asset Managers deal with a legacy architecture, where data is duplicated across different platforms, with difficulties in improving as new requirements come through.
• Different levels of data governance and management applied across the data.
• Difficulty in consolidating data to get to a consistent view, and understanding, of data across the company.

Effective data management is crucial to core investment operations, why is it so important to put the right technology in place now to address these pain points and drive growth?

Steve Collie: The asset management landscape is rapidly evolving, and the complexity and volume of data is only going to grow. So too is the transparency and granularity required in investment reporting and disclosure. The challenges we discussed expose the urgency around the need for innovation. Without it, firms risk getting left behind. A clear data strategy will help ensure:

• Operational Efficiency: Technology can automate and streamline processes where data is a critical component, reducing reconciliation costs and manual workarounds, freeing up time for value-added tasks.
• Informed Decision-Making: Advanced tools help funds analyse data in near real time, uncovering insights that guide smarter investment choices.
• Client Engagement: Technology enhances transparency, allows for customised asset allocation models, and near real-time updates, helping to improve client relationships.
• Regulatory Compliance: Mature data management supports adherence to multi-jurisdiction regulations and simplifies reporting requirements.
• Innovation and Growth: To build next-gen products and services, technology will enable specialised investment strategies, providing an edge in an increasingly competitive landscape.

Part 2:  How FINBOURNE’s Modern Financial Data Stack solutions are enhancing interoperability and driving sustainable growth

We’ve coined the term ‘Asset Management 2.0’ – what does that mean to you and where is Fidelity on that journey?

Yugo Ashida: ‘Asset Management 2.0’ for me, refers to the evolution in the way that we grow our business and servicing client needs, often in the context of enhancing business operations to make better informed investment decisions. The term implies a shift from traditional methods of asset management to a modern, technologically advanced, and data-driven approach.

The aim of ‘Asset Management 2.0’ is to achieve a flexible operating model that can adapt to unexpected changes, proactively respond to new requirements, and easily undertake new actions without adversely impacting on existing processes. One in which each of the different components of the business, can be modularized, all interconnected by data.

For this journey to be successful, it requires a change to business operating model as well as technology architecture. Whilst technology innovation is crucial to facilitating change, so too is the firm’s mindset. Gaining leadership buy-in is crucial to a successful data management evolution, not just within financial services, but in all industries. Therefore taking this data centric approach and partnering it with modern technology, will allow business to get hold of clean, interoperable data, to be used for efficient investment operations.

FINBOURNE plays a crucial part in helping us to achieve this future-state architecture. It’s also helped tackle some other challenges that we, and the rest of the financial services industry are facing, can you tell us more? 

Steve Collie: FINBOURNE’s platform is designed to power concepts like ‘Asset Management 2.0’ as well as help organisations improve financial data processes and drive growth. We have done this across financial services. For instance:

• We have built a portfolio management module on top of our LUSID Operational Data Store (ODS) to deliver next-gen portfolio management capabilities to the global hedge fund and private asset industry.
• We’ve helped RailPen, one of the largest asset owners in the UK (and another, soon to be announced pension fund), move on from archaic Enterprise Data Management technology to the LUSID ODS and Investment Book of Record (IBOR). Thanks to LUSID they can now incorporate ESG data, and also consolidate their private and public asset mix into a single view.
• In addition, in February 2023, FINBOURNE was selected to become the technology infrastructure provider for the Bloomberg, MarketAxess and Tradeweb initiative to build a consolidated tape for fixed income in Europe. This will help us achieve, our mission of reducing operational complexity and increase efficiency and transparency across financial services.

FINBOURNE can do these things because we focus solely on financial services. No other organisation is as well positioned to address the core data management issues faced in the industry, whilst building financial functionality on top.