Data Management is Key for Hong Kong’s Institutional Investors

In an era where data is both a critical asset and a growing challenge, Hong Kong’s institutional investors are reassessing how they manage and leverage their data to stay ahead in the market. The growing need for accurate and timely data from both internal and external sources, coupled with the pressures of managing cybersecurity and data costs, has led many to consider enhanced data management strategies.

As they look to control expenses while maintaining data integrity, investors are increasingly considering the benefits of automation, advanced technology tools and outsourcing data management to a service provider. These strategies not only streamline data analysis but also help to improve decision-making, enabling institutional investors to remain competitive in a rapidly evolving market.

Top Data Management Concerns Today

In a recent survey commissioned by Northern Trust of 300 senior leaders from global asset management firms, 73% of the respondents headquartered in Hong Kong find data sourcing and navigating the complexities of data management some of their top challenges as they look to launch new products and expand their offerings.[1] Data sourcing can be particularly challenging since it often involves aggregating information from a wide range of inconsistent or incomplete sources, making it difficult to obtain an accurate data set. In addition to data sourcing, nearly 47% of respondents from Hong Kong find consolidating disparate internal and external data sources to be a significant challenge. Working with disparate data sets can create a fragmented view, complicating analysis which can slow down decision-making processes. Finally, 40% of respondents from Hong Kong find managing the cost of data and cybersecurity to be a challenge, complicating their ability to meet their data needs.

These challenges are compounded by the increasing volume and complexity of data that investors must handle, which can lead to inefficiencies and heightened risks. As firms strive to remain agile in a competitive landscape, the pressure to streamline data management processes while ensuring accuracy and security has never been greater. This has made it vital for institutional investors to identify and address these concerns to remain competitive.

Data Management Solutions

To address these data challenges, 80% of Hong Kong respondents are considering outsourcing their data management in the next two years. Meanwhile, nearly 67% of Hong Kong respondents said they will look to leverage new technologies, such as AI, machine learning and the cloud.

Outsourcing to a service provider can offer a dual advantage because not only will it alleviate the burden of managing a complex in-house data system, but the provider will have access to and can leverage their already advanced technologies, such as a data warehouse or AI-driven analytics. By outsourcing to the right service provider, institutional investors can streamline their operations and benefit from cutting-edge tools without substantial internal investment, helping to reduce costs.

40% of Hong Kong respondents are also considering employing a component outsourcing strategy to leverage the expertise and capabilities of external providers, while retaining control and flexibility over their data management. For example, investors can outsource specific data functions or components, such as data sourcing, validation, or reporting, to a trusted partner, who can provide high-quality data services and solutions.

Data as a Strategic Asset

For institutional investors, data is a critical asset that drives decision-making, risk management, and overall portfolio performance. They rely on accurate, timely, and comprehensive data to inform investment strategies, assess market conditions, and optimize asset allocations. Effective data management involves not just the collection and storage of vast amounts of information but also the ability to process, analyze, and derive actionable insights from it. This means having robust systems in place to integrate data from multiple sources, maintain its quality and consistency, and protect it from cybersecurity threats. Ultimately, efficient data management empowers investors to make more informed decisions, respond quickly to market changes, and maintain a competitive edge in an increasingly data-driven landscape.

[1] Driving Growth in Asset Management 2024 | Northern Trust

Meet Your Expert

Aisling Keane

Aisling Keane is the Head of Asset Servicing, Hong Kong at Northern Trust.

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