Investment managers must take a fresh approach to data management, stressing trusted partnerships with outside expertise over traditional outsourcing models, as they seek to adapt to a rapidly changing economic landscape, a report has urged.
The binary build-versus-buy strategy that has been the basis of innovation adoption for decades has been upended by advances in technology that are enabling institutions to work in partnerships with external experts, the white paper by SimCorp stated.
Now organisations must look to forge integrated relationships with technology partners who will work within a collaborative team structure, the report added.
Download and read the SimCorp white paper by clicking on this link
“While partnerships combining internal control with external expertise aren’t new, today’s data-intensive environment demands a more integrated approach — one where partners become embedded collaborators rather than arms-length vendors,” the report, entitled The Data Transformation Imperative: From Operational Burden to Strategic Advantage, declared.
“Hence, organisations integrate specialised expertise into their operations while maintaining strategic control, creating a hybrid capability that neither building nor buying alone can achieve.”
New Pressures
The report, published by A-Team Group, comes as financial institutions are tackling new and more severe external pressures to reduce costs. Asset class diversification, regulatory pressures, industry consolidation and the rise of AI and analytics are reshaping data management for investment companies, requiring responses that bring “unprecedented data complexity at an immense scale” to organisations, it stated.Optimisation of data is a key source of value for organisations but many are struggling to get a grip on the management of the ever-increasing volumes of information they are having to ingest to power their modern operational, analytical and compliance processes.
The SimCorp paper argues that the new data pressures can’t be dealt with in the same manner that they have been in the past because firms aren’t in a position to do so technologically. It cited InvestOps Report 2025, a study commissioned by SimCorp, which found 58% of organisations struggle with data modelling and metadata management, while nearly half grapple with data quality issues and rely on fragmented solutions.
“These challenges represent systemic barriers to strategic decision-making and competitive differentiation,” the report stated. “Each new investment strategy and regulatory requirement adds layers of complexity, creating operational silos.”
New Paradigm
In what the report calls a “partnership revolution”, organisations are pursuing “effective data partnerships” that are characterised by:
Data unification: Arrangements that create a unified data foundation in which front-office portfolio managers, middle-office risk analysts and back-office operations teams work harmoniously from a single, consistent source of truth. This eliminates reconciliation nightmares and becomes essential for AI deployment.
Expertise integration: Unifying talent across an expanding range of disciplines in which partners provide specialised expertise while organisations retain control over core strategic processes. This model scales dynamically.
AI Acceleration: AI adoption is energised by pre-built architectures and proven use cases offering immediate automation capabilities.
This approach also helps solve another challenge that is gnawing at organisations from within – a chronic data talent shortage.
The report makes the case that integrating outside expertise into an organisation’s data team alleviates the need to source and hire new professionals, whose numbers are vanishingly thin and for whom competition is high.
By offloading routine operational tasks to partners, organisations can break the 80-20 rule that has a stranglehold on innovation within some institutions.
“Look for teams that include former practitioners from investment organisations, professionals who understand the pressure of market opens, the complexity of regulatory reporting and the nuances of different asset classes,” the report advises. “Technical expertise alone isn’t sufficient: partners must understand how technology serves investment outcomes.”
A Path Forward
Further, it suggests that the ideal partner is one that has proven scale, measurable return on investment and is AI-ready to match the organisation’s own measures to future-proof its operations.
“The distinction between vendors and partners manifests in how organisations approach client relationships. True partners assign dedicated teams who develop a deep understanding of your business, not rotating staff who require constant retraining,” the report advises.
“Look for evidence of long-term team stability, clear succession planning and investment in relationship continuity. Incentive alignment through meaningful SLAs demonstrates commitment to shared success.”
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