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What do aviation and asset management have in common?

Finding inspiration for your data transformation journey

A recent data management panel discussion hosted by RBC Investor & Treasury Services (RBC I&TS) in Luxembourg1 acknowledged the challenges associated with developing a meaningful data strategy and discussed how looking to other industries, such as aviation, may provide asset managers with valuable inspiration.

Key insights

  • Outdated IT infrastructure is a barrier to implementing an effective data strategy, but so is outdated thinking
  • Exploring best practices in other industries can inspire confidence and generate creative solutions
  • Breaking down interdepartmental and cross-organizational silos can help accelerate digital transformation

Data is critical to aviation. Airlines need to quickly gather, interpret, and analyze information to keep travelers safe, while also adhering to strict access-level controls and confidentiality provisions. Airplane parts suppliers also need to understand how their products perform in the field and continually optimize industrial performance based on that data.

The aviation industry, however, faced data efficiency challenges similar to those experienced in other sectors, including asset management. Disparate, unintegrated systems across different segments of the industry ecosystem made valuable, data-driven insights especially difficult to surface.

To overcome this, Airbus and data solutions provider Palantir Technologies developed Skywise, an open data platform that brings together aviation data from multiple sources onto one cloud-based platform. As a highly-regulated and established industry, aviation may have seemed an unlikely sector to radically transform their operations with data, yet Airbus and Palantir made it happen.

Looking to other
industries, such as
aviation, may provide
asset managers with
valuable inspiration

Panelist Lalarukh Haris Shaikh, head of partnerships with Palantir Technologies, said that when Skywise initially launched in 2017, it had one airline as a client and ambitions to create an entire data ecosystem. In the two years since, the Skywise community has grown to include over 90 airlines that account for over 8,000 aircraft, 10 suppliers, and millions in cost savings.

Factors for data success

Jamie Stevenson, managing director, global head of data and analytics at RBC I&TS, told the panel he became interested in the Skywise story several years ago because he saw the parallels with the challenges asset managers were facing with their data strategies.

“Our clients were receiving vast amounts of information from us every day and were often using it to populate Excel spreadsheets rather than to produce meaningful business insights,” he says. “They told us they wanted to do more with the data and needed support to make their data transformation projects happen.”

Based on his discussions with clients around the globe, Stevenson has identified six essential elements that can contribute to a successful data transformation:

1. The appropriate technology infrastructure, including robust and secure online storage. 

2. The right mindset. While organizations may be hindered by legacy information technology, they cannot afford to hold onto a legacy mindset.

3.  An understanding of how to organize, catalogue and curate data. Clients want their data to be organized in a way that helps them efficiently achieve their goals, across their business end-to-end, whether that is to build a risk model or input it into a cash-flow management system.

4. The flexibility to integrate new business priorities and goals once the data transformation is complete. It is an ongoing journey.  

5. The right talent. It is important to attract and retain people who offer diverse mindsets and skills and are committed to the data strategy.

6. Data stewardship. Care must be taken to ensure that data is used responsibly including adherence to regulatory privacy obligations, and the implementation of appropriate safeguards to protect data integrity and prevent misuse.

Harnessing data can help better support business goals

Data strategies need to have clear objectives or problem statements to be managed or resolved. Panelist Ben Pumfrett, director, middle office & derivatives at RBC I&TS says his conversations with clients are largely around the need for the consolidation of sources, in particular, bringing together information from multiple sources including third parties and custodians to provide a consolidated view of data.

Data strategies need
to have clear objectives
or problem statements
to be managed or resolved

“Clients want to know how they can harness their different data points so they can produce business insights and start servicing their customers more efficiently,” he says. “The topic of cash comes up all the time. Clients want access to their cash information on a real-time basis, so they can add insights from other functional data that wouldn’t historically be joined together in those systems.”

Pumfrett adds that data integrity is also becoming increasingly important from a regulatory perspective. Clients need transparency and easy access to these data points to complete their oversight obligations.

Breaking down silos

While the panelists agreed the asset management industry is making significant progress with its data transformation projects, they acknowledged there were few examples of what a “good” strategy looks like.

“The industry continues to solve issues in silos so we see opportunities for greater industry collaboration, which includes looking to sectors outside asset management for insights and inspiration,” Stevenson says.

Knowing what to do and doing it are two different things, which is why having the right mindset is important. Christelle Reichart, director, shareholder services with RBC I&TS says that data transformation is a journey that involves a change of thinking.

Data transformation is a journey that involves a change of thinking

“The asset management sector has been paper-based for a long time and there is no doubt change can be challenging,” she says. “But investors want this change to happen so it is important to continue to move ahead.”

Stevenson concludes that collaboration is essential to move organizations and the asset management industry forward.

“In the aviation industry, airlines have clear goals. Keep planes in the air at maximum capacity,” he says. “As an industry, we also need to find common ground. I am inspired by the huge amounts of optimism as well as the incredible examples of bringing together technology and data talent to solve age-old problems. It is incredibly rewarding when CEOs and COOs acknowledge and agree that technology can be transformational for their business.”

Current state of play

In response to three poll questions, attendees highlighted key challenges in developing a data strategy, and the current status of their data journeys. 

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Sources

  1. RBC Investor & Treasury Services (September 2019) Private Equity Summit, Luxembourg: “Maintaining Sustainability Within Asset Management"