Efficient Benchmark Data Management

Transcription

1 Efficient Benchmark Data Management Managing Index Data & Benchmarks for Enterprise Consumption Research Results

2 Managing Index Data & Benchmarks for Enterprise Consumption RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption Today s Presenters: Andy Barrow SVP, Head of Asia Pacific at RIMES Andy heads RIMES Asia Pacific operations and has had 20 years experience working with financial benchmarks across all asset classes in the front- & mid-offices. He worked with Datastream [when it was Primark] adding international equity benchmarks to the iconic Datastream Research Service; Reuters [before it Thomson Financial], working with numerous proprietary data & analytics providers; Thomson Financial [after they merged with Primark but before they before they became Reuters], continuing the development of benchmark servicing solutions. For the past 10 years, Andy has helped to build RIMES multi-award inning cloud-based Benchmark Data Service. Doug Neill Principal at Investit - Australia Doug heads Investit s Australian operations, working with clients in Australia & Asia to build efficient investment organisations. He has extensive experience in working with clients to assess, plan & implement operational & systems solutions. In particular he was responsible for developing a deep reaching operational assessment & alignment methodology allowing firms to truly assess the value of their IT and operational investment. Doug formed the Chief Operating Officers forum in Australia to facilitate the collective discussion about local & global issues affecting the industry as a whole. He is a regular contributor to the Investit Intelligence service. Prior to joining Investit Doug held senior IT positions within the investment management industry in the UK & Australia. RIMES

3 Managing Index Data & Benchmarks for Enterprise Consumption RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption Agenda RIMES Technologies DEFNs: Indices, Benchmarks, Customisations & Blends Benchmark Architecture [Benchmark Platform] Benchmark Data Service State of Play Commissioning the Investit Research The Results Doug Neill Questions & Comments Next Steps in Market Outreach RIMES BDS Research Insights RIMES

4 Managing Index Data & Benchmarks for Enterprise Consumption RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption RIMES Technologies Our Business is to Help Clients Reach Greater Efficiencies in the Management of BMs Born in 96. Australian from 02. Now Global Significant Operational Scale 13,000 Fully Services Daily BM Files Unique Benchmark Data Expertise 195 clients 500 data sources 36 country presence 100+ data partners 25 system partners Offices Around the World Outsourced Solution Must Understand More About the Problem than the Client Multi-Award Winning Service & Support RIMES

5 Managing Index Data & Benchmarks for Enterprise Consumption RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption Definitions Indices, Benchmarks, Customisations, Blends Benchmark Data Architecture [Data Platform] Benchmark Data Service RIMES

6 RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption Benchmark Data Service The State of Play 1. It s a Seller s Market for Benchmark Owners 2. Growing Complexity 1. The End of Alpha & Manufactured Beta 2. Customisations & Blends 3. Licensing Where is the Game of Monopoly 2 Headed? 4. Licensing the Benchmark Auditors are in the Field 5. Architecture Drivers for Great Efficiency or Great Cost 1. EDMS & Warehousing Benchmarks 2. Where Should Blends be Calculated? RIMES

7 RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption Commissioning the Research Serendipity 1. The research focuses on large, diversified, internationally invested asset managers 2. We marketing messaging showing that when AMs use RIMES as a specialist provider of BDS, the TCO reduces by much more than our subscription charges spend to save, a pure value investment 3. What startled us: TCO for BDS is not known The effect of architectural choices on the scale of TCO is not understood Managers really have no functional mechanism to find out 4. What we probably knew anyway: 1. AM s are universally dissatisfied with the scale of license fees charged by proprietary BM providers 2. A large resource commitment is made towards negotiating more favourable commercial terms with proprietary BM providers RIMES

8 Managing Index Data & Benchmarks Doug Neill Principal Investit London Boston Dubai Sydney

9 Background to research Survey 2Q11 34 investment management firms participated Combined AUM $10.5tn Survey audience heads or performance and data management 8

10 Challenges and Current Practices: Continued Growth 72% of managers expect to see an increase in the use of index data in their business 72% of managers expect an increase in demand for indices from emerging market exchanges and specialist vendors No managers expect to see a decline in demand 9

11 Challenges and Current Practices: Market Influence Increased complexity of investment strategies More detailed analysis of investment portfolios Growth in the number of indices available Escalating costs of market data 10

12 Challenges and Current Practices: Index Data Usage 42% of managers use more than 100 equity indices at index level 52% of managers use more than 100 equity indices at constituent level 11

13 Challenges and Current Practices: Benchmark Usage 41% of managers use more than 250 blended benchmarks 12

14 Challenges and Current Practices: Sourcing Index Data Over 60% of managers use specialist providers as main source of index data 13

15 Challenges and Current Practices: Major Concerns and Issues 85% Stated external cost of buying index data as a major issue. Index Data Cost of buying index data Managing relationships with index data providers Quality of index data provided by external sources Number of indices that need to be supported Timeliness of getting data into the business 60% Stated the number of customized and blended benchmarks to be supported as the main issue. Benchmarks Number of customized and blended benchmarks supported Complexity of creating and monitoring use of customized and blended benchmarks Internal costs of maintaining benchmarks Volume of data required to support benchmarks 14

16 Challenges and Current Practices: Cost Perceptions 93% of firms believe license costs to be the largest cost in using index data 86% of firms consider fees to be excessive Only 20% of firms expect increases in costs for internal resources and technology 15

17 Challenges and Current Practices: Operating Platform Index Data Operating Platform 73% consider platform to be strategic 71% consider platform capable of supporting future business growth Benchmark Operating Platform 86% consider platform to be strategic 81% consider platform capable of supporting future business growth 16

18 Challenges and Current Practices: Operating Platform 60% manually collect index data for alternative assets 37% cannot manage late delivery without significant impact on business 61% centrally validate traditional asset data 26% use manual validation techniques to confirm constituent count and market capitalization 61% use a data warehouse to store index data 45% store benchmarks in business applications 89% distribute consistent data to business teams, in correct format, on time 29% do not maintain a golden copy 17

19 Conclusions Complexity of investment strategies will continue to drive demand Expect continued growth in the use of customized and blended benchmarks Market data costs will continue to escalate Focus on internal costs as well as external costs Use of specialist providers as source of index data results in more effective operating platform Measure effectiveness and maturity of data processes to manage costs and meet business demands 18

20 Managing Index Data and Benchmarks Questions? investigate assess achieve Page 19

21 Managing Index Data & Benchmarks for Enterprise Consumption RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption RIMES Insights Initial work suggests BDS TCO multiples of between 4 & 10 times subscription license costs & the multiple depends on efficient BDS architecture Deep efficiencies are available from a more enlightened approach to TCO capture & enterprise architecture Asset managers should stop obsessing over subscription license costs there are bigger & more elastic costs at play If you re going to scale up through product build or merger/acquisition, don t assume the capability blueprint offered by larger European managers will deliver any real value RIMES

22 Managing Index Data & Benchmarks for Enterprise Consumption RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption RIMES Outreach Programme Next Steps Outreach will continue Efficient BDS White Paper BDS Capability Maturity Modelling BDS Round Tables RIMES

23 RIMES BENCHMARK DATA SERVICE Managing Index Data & Benchmarks for Enterprise Consumption Banking & Finance ICT Innovation Banking & Finance Awards 2011 Best Data Provider to the Buy Side Buy Side Technology Awards 2007, 2008, 2009, 2010, 2011 Best Implementation at a Buy Side Firm Buy Side Technology Awards 2011 Best Enterprise Data Management Initiative Inside Reference Data Awards 2010 Most Innovative New Service Banking Technology Awards 2010 RIMES