NAREIM Data & Information Management meeting key takeaways

Sept 15, 2023

Data governance is even more important in an AI world – and you sell it to C-suite by comparing it to the brakes on a car: to help the firm move even faster.

That was one of the key messages members shared during NAREIM’s Data & Information Management meeting in Austin this week.

Data governance programs – sell the positives and bring business onside:

• On selling data governance to C-suite and the business: “Data governance are the brakes on a car. They don’t slow you down, they let you go faster and have more control. It gives you support and some guardrails. Without them you’d be a lot slower and much more cautious.”

• Whether considering a centralized or decentralized data governance program, it was also imperative to have business champions who understood they had an active role to play in pushing the firm and data quality, the member added.

• “Data governance is run by the business. The business has to drive this with the technology partners working alongside,” one member said. It was a sentiment echoed through the meeting, tech teams were the support, but business needed to pitch and drive the strategy.

Data governance & AI:

• And in a world of AI and ChatGPT, data governance is even more critical, members agreed. “You are relying on a system to give you answers versus someone who knows the data and understands what’s wrong with the data.”

Other key takeaways from the meeting included:

• How do you train for patience around data breaks? Show little wins, constantly. Get the business to have skin in the game in terms of producing results, but show results and progress in small ways, frequently

• Sit down regularly with Portfolio Managers, accounting teams and investment teams to ensure better engagement. Face to face meetings build trust and it should be conducted at regular intervals. One member said they had to do quarterly visits to the firm’s offices across the US.

• The most impactful person on your data committee will be your CFO, after that it’s the technical expertise to understand what will work and won’t work in terms of data and innovation.

• Innovation budgets?

You don’t need dedicated innovation budgets to deliver improvements in data strategy. Instead, data should be embedded in every group and project across the firm, with business champions leading the innovation of the manager.

“There’s no point in having an innovation, you are either going to do it or you’re not,” said one member during the Austin meeting. “Everyone in the asset management team needs to be the innovation team. We should all be the innovation team because we should all be finding ways to do things better. It’s not about innovation silos, it’s about innovation throughout the firm.”

Current tech projects members were working on included: Cataloguing and forecast expenses, treasury management, HR systems, moving to 100% cloud-based solution, AI and machine learning technology.

• Get the business to pitch new tech solutions & include an allocation analysis upfront

New tech tools and solutions should also never be pitched unless an individual in the business puts their name against the idea – and pitches it themselves to leadership.

One Chief Data Officer revealed they never presented a technology project idea unless someone in the business had fully vetted the solution with the data team, including due diligence, background checks, rack rates and conducting an allocation analysis. Coupled with the data team providing a technical performance assessment, it meant a new tool was more likely to be adopted by the business if they were willing to do the work to get it approved by leadership.

• And there was more:

The meeting also saw member demonstrations of new projects they’re working on including AI-rent growth models for underwriting, heat map indexing and large language models for creating written analyses of large data sets, which could ultimately be used to provide a first draft of investment memos, or challenge existing underwriting assumptions.

The attendee list and presentations can be accessed by emailing IvyLee Rosario at irosario@nareim.org.