How research management solutions help firms solve complex market challenges

This article was written by Charlie Cohen, Research Management Solutions (RMS), Sales. 

Research has always played a fundamental role in financial planning, but as the needs and complexities of investment professionals evolve—there’s a growing need for more detailed analysis, additional considerations, and data sets, such as ESG and Alternative Data. Frequent advancements in technology, such as AI and machine learning can expedite the research process to improve the quality of results. However, it’s critical to have the right people, with the appropriate expertise, to interpret those results and share insights.

To share positive impacts, firms first need tools to connect their experts with accurate, timely information and to manage essential activities. This has led to research management becoming a top priority for firms, including during the fourth-quarter earnings season.

Investment in people and content remains strong

Many forecasts have predicted the demise of the human analyst, but research suggests otherwise. According to a new survey, conducted by Coalition Greenwich, over the next three years, asset managers’ investments in human capital will outpace their investments in technology and data acquisition by a 3:1 ratio. Fundamental analysts are a priority for organizations looking to expand their in-house research capabilities. Furthermore, Coalition Greenwich found over 50% of firms expect to increase spending for analysts specializing in environmental, social and governance.

Other roles expected to receive stable or increased investment include portfolio managers, quantitative analysts and traders. This growth, particularly in fundamental, quantitative and ESG-focused analysts, will continue to drive new content, research and insights that need to be shared within organizations.

Many investment teams need help managing information flow and knowledge sharing. What differentiates high-performing teams is the ability to exchange ideas, challenge each other’s proposals and, through a proper vetting process, create higher-value output.

According to the study conducted in Q1 2022, buy-side firms value features such as artificial intelligence, document annotation and tone/sentiment analytics. But the overwhelming majority of those surveyed are focused on accessing content quickly and easily. The ability to search across company filings, presentations, transcripts, third-party research and other content in one place was cited by over 70% of respondents. While these features and tools can offer substantial value for firms, the importance of the human analyst is clear. It’s the bridge connecting the insights gained from analysis to the clients that need it.

ESG gains prominence

The increased focus on ESG issues has also affected firms’ long-term thinking, with many establishing formal ESG plans or looking to do so. However, ESG planning is not evenly distributed across geographies as the same Coalition Greenwich study found that nearly 40% of North American firms lack a current or future ESG plan, while only 4% of European firms say the same.

Data plays an important role in determining the ESG ratings of companies. Internal ESG ratings or scores are most likely to be directly created by firms, often with the involvement of third-party sources. Common challenges with ESG include sharing data across the organization and integrating data and analysis into end-user and portfolio manager workflows.

When considering this, it’s no surprise that ESG data ranks first in priority and intensity for data acquisition plans, according to Coalition Greenwich, 92% of firms reporting plans to increase funding of ESG data. Fewer firms expect to fund increases in fundamental data or third-party data, by contrast.

Research management solutions optimize high-performing teams

As more data is generated, analysts create more research on that information, resulting in an ever-increasing need to effectively and efficiently share insights and produce actionable results. Many firms are motivated by the need to efficiently tap into the information advantages generated by fundamental research.

However, an eye-opening finding of the Coalition Greenwich study, is that 74% of firms still rely on email and spreadsheets to handle these complex research workflows, with 80% in Europe using such methods. This critical information often has a limited lifespan, leading to wasted potential when research can’t be easily shared. User adoption, different platforms and tools and an enormous volume of data are other significant challenges to sharing research.

An integrated platform that connects the human element, data streams, and technology can alleviate many challenges with sharing research. A research management solution (RMS) provides a primary means of identifying ideas for basing investment decisions and revealing where opportunities can be unleashed. When firms can unlock and integrate internal, proprietary data with other frequently used data streams, they can produce higher alpha and maximize the investment in both human capital and solutions that maximize output.

Bloomberg’s robust research tools enable clients to quickly access document intelligence, along with estimated and company financial data, bringing together a firm’s intelligence and findings into one research and analytics platform.

For more information about the future of research, access the full report.

To learn more about Bloomberg’s Research Management Solutions, request a demo.