By Thomas McHugh, CEO and Co-founder of FINBOURNE Technology.
Any new government brings the inevitable “change” message, but one thing never changes regardless of who has the keys to the treasury – seeking out departmental cost savings wherever humanly possible. With unprotected departments facing cuts of up to 2.9% according to the Institute for Fiscal Studies, Rachel Reeves faces the unenviable task of making eye-watering efficiency savings while also boosting growth.
This fiscal pressure provides a timely parallel for asset managers, who are also grappling with their own rising costs, particularly in the thorny area of operations. Just as any new government must prioritise where to make cuts without harming essential public services, asset managers need to navigate the longstanding challenge of reducing costs while protecting key business functions.Moves as drastic as ditching trading terminals to save millions, as some have considered, underscores the immense pressure to streamline operations amid years of shrinking margins and heightened competition. Streamlining data management makes more sense as a cost cutting approach, as it brings the added benefits of more effective decision making and the opportunities to innovate that arise from better managed data.
Much like our political system, data in asset management firms is often a tangled mess. Years of patching together disparate solutions with siloed data sets have resulted in a Frankenstein–like tech stack. Changing this in a big all-encompassing program that promises a new way can lead to disappointment and a change program divorced from reality – more like a Liz Truss-style fiscal horror show than an efficient machine. Transforming data into a core operational asset, at a cost that is manageable, can be a real game changer for Asset Management firms.
With all this in mind, like politicians addressing their electorate, asset managers must prioritise the needs of their investors. Extensive change to data management strategies may be needed, but it doesn’t follow that changes should all take the form of ‘megaprojects.’ Technology should simplify, not complicate. The right software should work seamlessly, providing accurate and timely information that transforms how firms use data to deliver enhanced services to their clients .
The lesson from the government’s fiscal challenges is clear: prioritise, streamline, and modernise. Asset managers should invest in integrated data management solutions that will ultimately result in a leaner, more efficient operation capable of thriving in a competitive landscape.
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