Unlocking the power of data in asset management distribution

The Challenges

Fragmented Data Ecosystems

I was always surprised that whilst many asset managers talked a good game around the importance of data and technology, few practiced what they preached. This was clear with a few simple questions asking for examples of insights gleaned from datasets, how the insights were being used or what the process was to convert data to information to insights to action. As the world of asset management becomes more digital, firms are inundated with data from various sources. This data, though invaluable, often exists in silos—databases, CRMs (Client Relationship Management systems), finance systems, marketing platforms, registries, to name a few. Bringing this data together, ensuring its consistency, and gleaning actionable insights from it is a challenge many asset managers grapple with.

Ineffective Investment

The surge in investment towards technology and data infrastructure, aimed at harnessing data insights, often fails to meet expectations. Companies pour significant resources into advanced technologies and platforms, anticipating improvements in efficiency, customer experience, and innovation. However, many of these investments fall short, as promised comprehensive solutions by vendors fail to deliver, usually due to a lack of support from the right business stakeholders, leading to squandered resources and missed growth opportunities. This issue highlights the importance of strategic planning and due diligence in tech investments. The challenge lies not only in the complexity of integrating new systems but also in navigating overhyped promises. As a result, businesses risk falling behind in the competitive digital landscape if they cannot leverage technology effectively. To avoid such pitfalls, a critical and analytical approach in selecting technology that aligns with business needs and delivers real value is crucial.

(Lack of) Fit for purpose solutions

The asset management industry faces a significant challenge due to the lack of fit-for-purpose solutions. Many available platforms are not designed specifically for asset management, requiring extensive customization to meet the sector's needs. This process often involves hiring external CRM experts, which not only increases costs but also diverts internal resources from their primary tasks. Customizing generic platforms to align with the unique requirements of asset management is both expensive as they require internal resources like a CRM expert/team of experts or external support (many hire Salesforce consultants). This process is also time-consuming (transformation programs sometimes take more than a year to implement). It necessitates expertise to ensure the software supports specific workflows and compliance demands. However, even with these efforts, there's a risk that the customized tools will not be fully utilized, leading to inefficiencies. The need for tailored software solutions in the asset management industry is clear, as the current approach leads to unnecessary expenses and operational inefficiencies.

The Need for Real-time Insights

In today's fast-paced financial markets, the ability to adapt quickly is crucial for asset managers to stay ahead of the competition. Market dynamics shift rapidly, driven by global events, technological advances such as Chat GPT/Open AI, macroeconomic shifts and changes in investor sentiment. We therefore need tools that provide real-time insights, enabling managers to make informed decisions swiftly. Traditional methods, reliant on manual data analysis, struggle to keep pace with these changes, often resulting in delayed responses and missed opportunities. Modern asset management requires the integration of sophisticated, technology-driven tools that can process vast amounts of data and deliver actionable intelligence instantly. The shift from conventional, slow-paced analysis to agile, real-time decision-making is essential. Managers need to move beyond historical data, embracing tools that can predict and respond to market movements and client/prospect activity as they happen. Those who can leverage these advanced capabilities will navigate the market's complexities more effectively, staying ahead in the competitive world of finance.

Evolving Client Expectations

As digital technologies become ubiquitous across sectors, clients increasingly demand seamless and personalized experiences that are data-driven. This shift necessitates organizations to not just gather data but to transform it into actionable insights for enhancing customer interactions. The challenge lies in locating, accessing and then analysing customer data to predict needs and tailor services, leveraging advanced analytics and AI. Moreover, this shift towards data-driven client experiences requires organizations to adopt an evidence-based approach, ensuring decisions are informed by data. This involves cross-departmental collaboration to integrate customer insights, making every interaction more relevant.

Why Solutions are Imperative

Future-Proofing with AI

The use of advanced technologies, from AI to serverless computing, isn't just a trend or fad - it's the future. Many firms are now able to cut administratin costs significantly using Open AI or increase sales activity from AI driven marketing leads. A simple example is where the AI will inform the salesperson who to speak to, when to speak to them and what to discuss to maximise the chance of making the sale. Firms that fail to adopt and adapt risk becoming obsolete.

Operational Excellence

Consolidating data and automating insights can significantly reduce operational inefficiencies, leading to cost savings, improved risk management (and regulatory reporting) and better resource allocation.

Enhanced Decision-Making

Access to cohesive, real-time data can significantly enhance decision-making capabilities, ensuring firms stay agile and responsive. Importantly, the decisions can be measured, providing accountability. As the firm learns from the insights, the models can adapt creating a virtuous cycle of improvements.

Client Retention and Acquisition

In a competitive landscape, offering clients data-driven insights and experiences can be a significant differentiator, aiding both retention and new client acquisition.

Our Journey at Datafabric Pty Ltd.

A new paradigm for distribution operations and intelligence While challenges loom large, innovative fintech solutions are emerging to bridge these gaps. Platforms like Datafabric’s "Compass" consolidate diverse data sources into a "single source of truth," addressing fragmentation. Real-time, AI-driven insights empower asset managers to make quicker, more informed decisions. With experience in both data analytics and leading distribution functions at asset managers, the two founders of Datafabric Pty Ltd are well versed in the challenges asset managers face and the potential solutions. This led to Datafabric being established to help asset managers realize their potential by using data-driven insights in their sales, marketing and business management processes.

The early market success

Market-testing provided validation to the idea that most asset managers struggle to consolidate data and use it in a way that helps them be more effective at sales and marketing, using insights derived from the data. Once they could see the benefits and how different stakeholders could all build different workflows (from the same single, central data lake) to align their objectives to the business objectives there was typically a real “eureka” moment.

These stakeholders include sales teams, marketing teams, product teams, customer service teams, consultant relationship teams, boards, executives, etc. Being able to use the data and AI integrations to improve outcomes was one thing but what was important was to measure the success of the solutions put in place through better data to track against KPIs and hold everyone accountable for their roles, including the people building the data and technology solutions such as Datafabric.

The business impact

The solutions focus on: ● Improved sales and marketing outcomes and customer relationships ● Improved reporting to various stakeholders on distribution activity (Board, portfolio management teams, etc.) ● Helped the various stakeholder teams (sales, marketing, product, customer relations, etc.) focus on activity that would add value and the value add could be easily measured, tracked and ultimately processes improved ● Helped make the teams accountable to their KPI’s with real data and show Sales and Marketing ROI

Conclusion

In conclusion, the asset management industry stands at a digital crossroads. By acknowledging challenges and adopting tailored, innovative solutions and AI, asset management firms can not only navigate this new frontier but thrive within it. Asset management is ready to change and have it’s Xero moment. Join us in reshaping the future of asset management through the power of data and AI!