According to a new research report by quant technologies provider SigTech, 80% of investors plan to increase their data budgets over the coming two years. However, there is widespread consensus (82%) that the process of onboarding data into internal systems is complicated, time-consuming, and frustrating.

“80% of investors plan to increase their data budgets over the coming two years.”

The SigTech Financial Data Impact Report 2023 surveys 121 data management experts in the investment management industry from around the world. It provides insight into the key data management trends transforming their operational models.

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Other important findings include:

• Four out of five firms expect to further increase their outsourcing of data management services
• On average, it takes investors approximately three months to onboard a new dataset
• Investors struggle to utilize alternative data effectively, with quantifying its value posing the primary challenge

“The trend towards quantification is universal across the investment management industry,” said Daniel Leveau, SigTech’s VP of Investor Solutions. “To keep their edge and remain competitive, investors are rethinking their operating models to find efficient and scalable solutions to challenges that fall outside their core competencies.”

The report also reveals that the market for alternative data is growing rapidly as investors discover its potential to provide unique insights. 75% of those surveyed intend to increase their usage in the next 12 months. The most popular alternative datasets utilized by investors are survey and app usage data.

“The market for alternative data is highly fragmented, with no agreed best practice for connecting data vendors with data users. This issue needs to be resolved before alternative data’s potential can be fully realized,” Leveau continues.

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