Sharing research, product information, and other data with your competitors probably isn’t the first thing you’d think of when looking for ways to grow your business, work more efficiently, and manage risk better. 

If anything, it would be last on your list. 

Or not on your list at all. 

Why share potentially sensitive information with firms that are vying for the same customers you are?

But while it sounds counterintuitive, this approach can deliver huge dividends for everyone. When firms organise, share, and manage data together, they can create value — for both themselves and their customers — that goes far beyond what they could ever achieve on their own.  

Here’s why shared data ecosystems are good for asset management firms, and a look at the steps you can take to fast-track their development. 

Why share data with your competitors?

Shared data ecosystems aren’t a new concept. Banks have been using credit referencing agencies to assess credit risk for decades. Similarly, it’s par for the course for retailers to rely on shared data from payments processors to improve their customer journeys and deliver smoother shopping experiences.

According to the Open Data Institute shared data ecosystems have seven compelling benefits for businesses. They:

  • Make it easier to identify market gaps and pursue new opportunities
  • Increase customer trust
  • Make it easier to resolve common challenges
  • Encourage innovation
  • Facilitate compliance
  • Help optimise supply chains

From an asset management perspective, shared data ecosystems boost productivity by making it easier for everyone to find the information they need without having to dig through endless piles of spreadsheets or spend days chasing their tails. 

They can also help promote openness and transparency. With recent research finding 65% of clients mistrust their financial advisors, this is sorely needed. 

More to the point, when firms team up to address common challenges — simplifying ESG reporting, for instance — they can pool ideas and resources. This is much more efficient and cost-effective than it is for everyone to try and develop their own solutions.

Moving into the fast lane: four ways to speed up the development of inter-organisational data ecosystem

As beneficial as they are, shared data ecosystems can’t be built overnight. Leaving aside that asset management data tends to be heavily siloed and locked in outdated technologies, inter-organisational data sharing requires a significant change in mindset.  

The Open Data Institute has observed that openness, particularly with competitors, can feel hugely uncomfortable for firms that aren’t used to it.

More importantly, if resources are going to be pooled and data shared, there must be systems in place that ensure everyone benefits equally. And the quality of that data needs to be trusted by everyone. 

So how do you overcome these hurdles?

1. Understand what problem you’re trying to solve

It sounds obvious, but vision is crucial. For competitors to band together and collaborate effectively, they need to have a common goal and a clear idea of what success should look like. 

With this in mind, you should start by asking yourself two key questions. What problems are you trying to solve? And how will everyone — inside your organisation and out — benefit from solving these problems?

The answers to these questions should inform the process from start to finish, including what kind of data sets you need and what technologies you’ll use to access, store, and share that data. 

2. People first, technology second

A frequently repeated statistic states that 80% of digital transformation projects fail or fall short. 

More often than not, this is down to people issues  

Technology can be hugely transformative. But only if it meets the needs of the people it’s meant to serve. For this reason, it’s crucial to get those who’ll be tasked with making the system work involved as early as possible. This will help ensure that the technology that’s put in place addresses the problems that actually need to be addressed. 

At Fundipedia, we use design thinking methodology to get to the bottom of organisations’ data problems. 

Instead of picking a technology and tweaking it in the hope it’s fit for purpose, we create an environment where end-users’ real issues can be identified and defined. This ensures that the chosen technology is designed around those issues and, so, fits the bill from the off. 

This user-first approach increases technology ROI by as much as 229%.

3. Define ownership

The Open Data Institute reckons control and access are two of the main barriers to inter-organisational data sharing. 

Who will own a particular data set? How is it accessed and when? And who will be accountable for the integrity and accuracy of the data?

For a shared data ecosystem to be truly effective, it’s helpful to set expectations around this from the get go. Lay out the terms and conditions under which the data will be shared in detail, including legal and regulatory requirements. 

More to the point, start small and build from there. Sharing limited amounts of data in a controlled environment allows everyone to test the waters and builds a foundation on which further data sharing can happen. 

4. Ensure quality at every stage of the distribution chain

Data can start out being complete and accurate, only for the quality to deteriorate as it moves downstream. 

The reasons for this are complex and interconnected — manual processes, human error, focus on more pressing tasks, poor third party controls… the list goes on. Regardless, errors create reputational and regulatory risks. And they could destroy hard-won trust in the shared data ecosystem. 

With so much at stake, it’s crucial to make data reconciliation a regular feature of the process. Fundipedia makes this simple by reconciling data automatically in real time, which means everyone can always rest assured of its accuracy. 

There’s strength in numbers

Where vaccine development typically takes 10 to 15 years, worldwide collaboration and data sharing made it possible for over 200 Covid-19 vaccines to be developed in just over a year. 

Even on a smaller scale, data sharing has enabled organisations — and governments — to speed up progress and accomplish all sorts of great things: from growing hardier crops to delivering more efficient and convenient public services. 

Competition may be part of the fabric of business and, indeed, of human nature

But with the right mindset and approach, pooling data gets you much further ahead in the long term.  

At Fundipedia we’ve created a platform that lets you gather, organise, and share complete, accurate data internally and with third parties with a few clicks. 

Book a demo today