A newly released survey has found that Asia-Pacific investment institutions see themselves as relatively advanced in terms of implementing a holistic data strategy, and yet they also see severe room for improvement.
Nearly half, or 46%, have a holistic data strategy in place, compared to 30% and 31% in the Americas and Europe, Middle East and Africa (EMEA), respectively, according to the State Street Data Opportunity Study 2023.
In the context of the survey, a “holistic data strategy” was defined as data usage, including current as well as future use cases, and having the right tools to implement the data strategy.
“Asia-Pacific institutional investors know that they have good-quality data, but they want to evolve how they operate now because they realise the need to improve further,” Kevin Hardy, head of Singapore and Southeast Asia at State Street, told AsianInvestor.
The study analysed responses from 520 global asset owners and managers, with 165 based in Asia Pacific.
The general takeaway is that many investors in Asia Pacific have a highly complex data architecture due to early efforts to implement technology in their business.
“The typical model we see for a lot of investors is a mix of older, legacy technology and newer, best-of-breed technology.
"Ultimately, their internal technology teams are doing a grand job of holding these opposites together, but it gets very complicated. Thus, they lack the ability to have better data-driven decisions,” Hardy said.
Disparate applications make for costly technological architecture, he said, and also making it challenging to use data to drive fast and easy decision-making. Institutions may worry about having the right people with the right training to handle system upgrades and ability to implement new technology.
“The key factor for technology progress among Asia-Pacific investors are interoperability of data. Clients want to ensure that they can utilise the data since they already have it,” Hardy said.
He noted that 36% of the survey’s Asia-Pacific respondents identified high-quality and accurate data sources as one of their greatest strengths, a higher proportion than their global peers.
Half the Asia-Pacific institutional investors in the survey said they improved investment returns, new client acquisitions, and market share growth by at least 10% by deploying a holistic data strategy.
Still, around 75% of Asia-Pacific respondents rated their data capabilities across accuracy, access, analytics, and governance metrics as being at a nascent or intermediate stage.
Some obstacles were highlighted in the survey. The challenges mentioned most frequently were resources and time for upgrading the skills of existing staff, as well as recruiting skilled staff.
“These obstacles can be cleared because the clients recognise that there are economic benefits. The survey highlights that once the holistic data strategy is in place, investors can identify deltas of 10, 20 or 30% in terms of improvement across different areas,” Hardy said.
For 77% of the surveyed Asia-Pacific institutions, more than a quarter of their existing technology needs an upgrade to meet their strategic goals.
Many firms are prioritising, quite substantially, investments in technology and potentially prioritising it over attracting talent. The technology can be acquired, but talent is difficult recruit due to shortage, Hardy pointed out.
“Firms are open to partnerships where talent are present. If they are comfortable with outsourcing, firms will not miss out on using the data as desired,” Hardy said.
The survey identified that institutions are happy to partner with specialist fintech and asset management firms for their data needs. There are preferences to use large, established technology partners, and especially to outsource within data visualisation, analytics, and reporting functions.