Trading and investment software provider SimCorp has several solutions available, but it is best known for its front-to-back investment management offering, SimCorp Dimension.

However, since its $60 million acquisition of Aim Software in 2019, SimCorp has been making a bigger push into the data management space. The vendor has fully integrated Aim Software as its enterprise data management (EDM) solution, dubbed SimCorp Gain. Now, it is pushing the data management envelope further with DataCare, its cloud-hosted managed service offering for market and reference data management.

DataCare was developed in collaboration with global buy-side organizations and is a multi-asset, end-to-end solution for all aspects of financial data management. It runs on SimCorp Gain, and aims to fill a gap in the market by combining business operations, data advisory, change management, and multi-asset class coverage in a single data management platform.

There were many factors that prompted us to look for change, but the most important one was that we were struggling with capacity constraints to build out new capabilities. We have a great team of data, technology, and business experts—a highly valuable combination of skills—who were spending their time on monitoring, collecting, and preparing data, and we needed to free up quality time for them to focus on data analytics and harnessing insights. 

Ruchir Verma, Zurich Insurance Group

Guillaume Rondy, vice president and global head of the data and communications offer line at SimCorp, says DataCare faced the same issue as the company’s other products, such as digital client communication and reporting solution SimCorp Coric.

“People don’t really know [about it]—in the same way we have a bit of the same issue with reporting, where we’ve got really strong reporting solutions but the market still sees us as this front-to-back system,” he says.

But things are slowly changing as firms’ approach to data evolves. Rondy says financial institutions wanted full control of data in the past, and many built in-house systems as a result. Now, these firms want a more standard data management setup that is quick and easy to operate and comes with a more reasonable price tag.

“Data is very important. But what’s more important is the outcome of the data management process. Now that people have been running it, they appreciate that it’s not rocket science,” he says. Unlike the sell side, where the calculations can be complex, the buy side has an easier time of it dealing with end-of-day data and intraday data cleansing, for example, which might suit a standardized data management platform.

Since launching DataCare in April 2020, SimCorp has attracted eight clients, which Rondy says is encouraging. “That’s really good momentum to have eight customers signed in 18 months. It’s not for everybody, and we fully appreciate that,” he adds.

Virginie O’Shea, CEO and founder of Firebrand Research, says Aim Software had been around for a while and specialized in supporting the requirements of European asset and wealth management clients. 

“The offering was lightweight and reasonably priced, and therefore it picked up a lot of clients that were otherwise wary of a larger data management platform implementation. Post-acquisition, the focus seems to be on running a fully managed data service for these clients—taking away the heavy lifting for data support and enabling these firms to reduce the size of their operations teams accordingly,” she says.

She notes that managed services have been “slow to take off” in the past, but as the number of data management tasks an investment operations teams must handle has grown, these offerings are “gaining a little steam.”

She adds, though, that “the buy side is much more comfortable with these kinds of arrangement than the sell side, so though it will be a bit of a slog due to the long sales cycle, they should do well if they keep their flagship clients happy.”

Holistic approach

Zurich Group Investment Management, the investment management arm of Zurich Insurance Group, is one of SimCorp’s first DataCare customers.

Ruchir Verma, head of global services, investment management at Zurich Insurance Group, says getting the right value from data requires people who can understand it, analyze it, and make the most out of it. He says Zurich’s investment management unit often found that workdays were not long enough for them to do all they could with their data. 

“There were many factors that prompted us to look for change, but the most important one was that we were struggling with capacity constraints to build out new capabilities. We have a great team of data, technology, and business experts—a highly valuable combination of skills—who were spending their time on monitoring, collecting, and preparing data, and we needed to free up quality time for them to focus on data analytics and harnessing insights,” says Verma.

Before transitioning to DataCare, the investment management unit was using an on-premise EDM solution with the software, infrastructure, and value chain managed within the team. Customizations and developments just added complexity to the underlying software, while delivering the same output. This inefficiency and additional complexity ultimately drove the unit to use SimCorp’s DataCare solution.

Now that it has transitioned to a fully managed data-as-a-service offering, Verma says the team no longer spends time on processes, the underlying software, or technical changes. “Instead, we are focused on helping the business get the best possible outcomes,” he says.

DataCare’s change management and data advisory features make it a holistic EDM service, according to Verma. “The change management element is important as it allows us to roll out changes at a very fast pace. For example, if we have new data types that need to be onboarded, regulatory changes that require new attribute sets, or changes to vendor feeds that need to be implemented, these changes—which are all time critical in nature—are all managed by SimCorp as part of the DataCare service,” he says.

Meanwhile, the data advisory service feature in which SimCorp has specialists available in a range of asset strategies and data types to help firms keep up to date with industry, regulatory and market changes, delivers the right support, particularly in a continually evolving landscape, he says.

“For example, ESG datasets are still changing shape, and having a vendor who can advise on how to manage and incorporate these changes, and ultimately remain one step ahead, is extremely valuable.”

‘Out of the box’

SimCorp’s DataCare offering appeals to two types of firm, Rondy says. The first are those that are less mature in their data management journey, and that perhaps currently manage their data using spreadsheets or a proprietary or third-party accounting system.

The second group consists of firms that have set up a traditional data management system but are struggling as they discover it requires more resources, time, and money than anticipated to maintain, upgrade and support.

“If you’re going to have to implement the software, run it, operate it, and make sure you’re always up to date with whatever your business needs, that’s a big ask,” says Rondy.

The vendor will need to consistently invest in the managed services side and the technology side for DataCare—this isn’t an area that can be neglected due to the rapid evolution of investment data requirements over time—just look at the growth of ESG for proof.

Virginie O’Shea, Firebrand Research

Instead of going to the trouble of implementing and running a system, then finding that it’s getting too expensive to manage, he says firms can opt for a more “out of the box” system based on a service-level agreement.

“The people I’ve just described have gone through the pains of building [a system] themselves or with a vendor and realize, ‘OK, every year I’ve got to add more people to it,’ so it becomes a people problem because technology hasn’t kept up. It is something we are very conscious of, so we are deploying technology behind it to enable our service to be more efficient. But if every single customer has to do that, then there’s a lot of wasted effort.” 

Many asset managers and pension funds have also grown in size, sometimes through acquisitions of firms that may already have their own system. So which system stays and which system goes? 

This is where an as-a-service offering can make a difference, Rondy says.

Continual investment

Firebrand Research’s O’Shea believes DataCare will require ongoing investment from SimCorp if it is to continue helping firms stay ahead.  

“The vendor will need to consistently invest in the managed services side and the technology side for DataCare—this isn’t an area that can be neglected due to the rapid evolution of investment data requirements over time—just look at the growth of ESG for proof. This will have to be an equal focus for the vendor as the offering grows—if they hope to become a serious contender in the EDM managed services space, they will have to prove to clients and prospects that they will be investing for the long haul,” she says. 

Particularly when it comes to the buy side, O’Shea says compatibility and integration with other tools such as data governance and data quality toolkits are increasingly important, along with the ability to support as many datafeeds as possible. 

“The rapid adoption of new sources for ESG is a case in point—vendors need to consistently keep up with client demand to retain an edge in this market. The increasing burden of compliance requirements on the buy side will also add to the list of requirements that vendors must manage—reporting, dashboarding for operational risk management, APIs—there’s a long wish list for improvements,” she says.

SimCorp has hired 30 people across five global locations build out DataCare, providing round-the-clock services in data operations, advisory, and change management.

Rondy says the firm is investing in the Gain offering that underpins DataCare in order to improve the service it provides to customers. It is also looking to increase DataCare’s scope. “Historically, it was security and price only to start with. We’re now adding corporate actions data because we realize we can actually operate this with our teams. We are also adding ESG data, so we’ll do ESG data management-as-a-service. For existing customers, it’s a pretty easy add-on,” he says.

SimCorp is in the process of signing agreements with several large ESG data vendors to process their data.