Data Driven Pension Funds via Right-Sized Solutions: A Guide for Mid-Market Public Pension Plans

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• On: 12/07/2023 12:21:13
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By: Lou Eperthener, ICS

The path towards a data-driven future for mid-market public pension plans is paved with the right partnerships and right-sized solutions.

This is an excerpt from NCPERS Fall 2023 issue of PERSist, originally published October 24, 2023.
 
In the realm of public pensions, the management of investment data stands as a cornerstone for enhanced investment decisions and transparent reporting to your members and regulators. The journey towards becoming a data-driven organization begins with partnering with a solution that is "right-sized" for your organization.

Investment Data: The Bedrock of Informed Decision-Making

Investment data, encompassing a wide array of metrics and analytics, serves as the bedrock for informed decision-making. It provides a clear lens through which the risk, performance and potential of investments can be assessed.

Right-Sizing – A Critical Factor in Success

The concept of right-sizing is critical for the mid-tier market. Understanding that we have different challenges to tackle compared to the large tier 1 organizations is essential.

• Being Right-Sized? - Being right-sized in investment data management signifies a balanced approach where the solution neither overwhelms with complexity nor underwhelms with inadequacy or flexibility. It's about having the right level of functionality and scalability to meet the evolving needs of your organization.

• Your Partner: A Catalyst for Enhanced Capabilities - A right-sized partner and solution resonates with the unique needs and scale of your organization. It's about having a data platform that aligns with your operational dynamics, ensuring a seamless integration and an enhanced data analytics capability.

Data Challenges: The Hurdles Mid-Tier Public Pension Funds Face

Mid-tier public pension funds often grapple with fragmented data sources, which hinder a consolidated view of assets. The lack of a unified data platform can lead to inefficiencies, inaccuracies, and a prolonged decision-making process. Moreover, the evolving regulatory landscape and the need for enhanced data access further accentuate data management challenges.

Empowering the Business Users: The Essence of Data Democratization

The concept of the citizen developer, individuals who can create or modify systems and data without formal coding skills, is a testament to the democratization of data. This paradigm shift empowers a broader spectrum of personnel within a pension fund to engage with and leverage data to drive informed decisions.

Data democratization enables business users to access the data for the specific tasks they are required to perform, with fit-for-purpose tools and channels to access the data. See below for a diagram that outlines the typical roles/personas and how these engage with data across an organization:

Mid-tier firms simply do not have the same resources as tier 1 peers - especially when it comes to IT resources. Hence, it is essential that to drive firms towards becoming more data-driven, solutions have to be geared towards the business user. This means empowering these users with the capability to perform, what has historically been seen as, complex data tasks without the need or reliance on advanced technical skills.

Final Thought

The path towards a data-driven future for mid-market public pension plans is paved with the right partnerships and right-sized solutions. It's about unlocking the potential of investment data to foster a culture of informed decision-making and sustainable growth.

About the author: Lou Eperthener is a FinTech executive with over 25 years of experience. His experience spans the landscape of software solutions supporting the front, middle and back office functions. Lou specializes in helping Investment Officers, portfolio managers, investment analysts and operations directors understand the benefits of embracing technology to harness the power of data, increase operational efficiency and improve the investment decision process. Prior to helping ICS launch in North America in 2022, Lou has held leadership roles at Eagle Investment Systems, SimCorp and Princeton Financial Systems (a State Street company). He graduated from Washington & Jefferson College with a Bachelor of Arts in Economics.