Investment managers and asset owners are undergoing a data-driven transformation as their organizations seek to unify data across front-, middle- and back-office functions for a competitive edge.
According to our Data Opportunity report, many firms are actively implementing strategies to break down legacy data silos and enable real-time portfolio insights.
In a recent panel discussion, Chris Rowland, our head of Custody, Digital and Fund Services Product and David Eshenower, head of State Street Alpha discussed the implications of State Street’s industry survey for institutional investors. This article highlights three key lessons that emerged from their conversation.
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1. Unify your data to deliver a competitive edge
The financial industry is entering an era where a holistic data strategy is becoming a best practice. As highlighted in our industry survey about data use and management, around a quarter of respondents already have such a strategy in place, and over half of those who don’t are actively implementing one. The drive to unify data across the organization is rooted in the need to break down silos between front-, middle- and back-office functions. This integration enables investment managers to access a complete, real-time view of their portfolios, risks and operational processes.
Discussing the survey results, Rowland emphasized that technology is both a solution and a challenge in this journey. The proliferation of processing engines and bespoke data standards across platforms makes harmonization difficult. Achieving a unified and normalized data set across asset classes is a complex task, given the vast scale and diversity of financial data. However, the payoff is significant: Nearly all survey respondents expect their holistic data strategy to boost investment performance, increase revenues and deliver operational cost savings, with many anticipating improvements of 10-40 percent, with some expecting gains above 50 percent.
A unified data approach also enhances transparency and user experience. Portfolio managers and chief investment officers increasingly demand real-time information, such as accurate cash forecasts and status updates on trades and corporate actions. Oversight teams rely on tailored data views to fulfill regulatory obligations efficiently. In times of market crisis, the ability to access and interpret relevant data quickly is critical for effective response and decision-making. Ultimately, a holistic data strategy positions investment managers to outperform by enabling better insights, operational efficiency and proactive client service.
2. Make data quality and access a top priority
Data quality, governance and flexible access are foundational for effective investment management. Rowland and Eshenower’s conversation underscored that poor data quality, fragmentation and lack of standardization are major obstacles to realizing the benefits of digital transformation and artificial intelligence (AI). Rowland pointed out that capturing data accurately at the source and adopting industry standards — such as ISO 20022 for cash processing — are critical steps. These efforts ensure that data is accurate, complete and ready for use across all business functions.
Institutional investors increasingly expect data to be available “on tap,” supporting real-time operations and predictive analytics. State Street’s approach is to be agnostic to distribution channels, offering data via application programming interfaces, digital sharing or client portals, depending on client preference. This flexibility is essential, as different stakeholders require different views and delivery methods. Additionally, providing analytics and visualization tools helps clients interpret data, monitor quality and respond quickly to anomalies or market events.
Robust data governance and stewardship wrap around these processes, ensuring discipline, control and compliance. Automation of monitoring, alerting and validation at every stage — from ingestion to downstream consumption — further enhances data reliability. As Eshenower noted, dashboards and visualizations give stakeholders a proactive view of data completeness, timeliness and accuracy. In summary, prioritizing data quality and flexible access is not just about operational efficiency; it is the foundation for automation, compliance and delivering exceptional client service in modern finance.
3. Harness AI and real-time insights
The integration of generative AI (GenAI) and advanced analytics is rapidly transforming investment management. According to the survey, over 60 percent of respondents see GenAI as providing the most value in defining investment objectives, with expectations that its impact will expand to product creation and strategy selection in the coming years. Eshenower noted that technology underpins every aspect of this transformation, from the infrastructure powering large language models to the application environments that bring data to life for investment use cases.
AI’s true potential is unlocked when it is built on a foundation of high-quality, well-governed data. Rowland and Eshenower both stressed that the main challenge is not the AI technology itself, but ensuring the data is structured, normalized and accessible across legacy systems. When these hurdles are overcome, AI can automate routine processes, provide predictive insights and enable proactive management of operational risks. For example, AI could help predict trades at risk of failing before they occur, optimize compliance workflows and deliver real-time analytics to the front office.
While the current focus is on front-office applications, both speakers highlighted the untapped value of AI in the back office. As data normalization progresses, AI will increasingly drive efficiency, automate exception handling and support crisis management. The evolution will see less manual intervention and more automated, insight-driven processes, freeing investment professionals to focus on value-added activities. Embracing AI and real-time analytics is essential for investment managers seeking to stay ahead in a rapidly changing market.
Investment managers and asset owners find themselves at a critical intersection where the ability to derive investment and operational insight from massive volumes of market data is key to differentiating their value proposition among institutional and retail investors. Organizations that embrace holistic data management, integrate front- and back-office insights, harness AI, and prioritize data quality will be best positioned to thrive in this dynamic environment. The time to act is now — those who lead the way will set the standard for the next generation of investment firms.
Originally published on statestreet.com.
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The material presented is for informational purposes only. The views expressed in this material are the views of the author, and are subject to change based on market and other conditions and factors, moreover, they do not necessarily represent the official views of Charles River Development and/or State Street Corporation and its affiliates.