Wealth and asset managers have always relied on data to measure and report portfolio performance. Since markets move at digital speed today, financial advisors and asset managers need more frequent and informative updates. Thankfully, they don't have to rely on traditional reporting and presentation methods.
In the old days, reports were based on tables of raw numbers—often printed on paper but sometimes in spreadsheets. Evaluating asset performance or any analysis required untold hours of study and interpretation.
Over time, data visualization in asset management became more commonplace. Heatmaps—those color-coded matrices—made information a little easier to digest. However, new and creative data visualization methods quickly draw focus to what's important in asset performance management. And as technology evolves, so do the visualization methods available to asset management firms.
Bringing multiple data types together & presenting large data sets
To fully understand why creative data visualization changes the reporting game, consider the multiple types of data that asset managers must consolidate for investor reports. There are the holdings themselves, which can be broken down into stocks, bonds, and mutual funds, among other assets. The assets should also be categorized into types, such as real estate, equities, commodities, and the like.
Investment types must be further divided into technology, energy, or finance sectors. A geographic breakdown is also needed so clients can see the different countries or regions where their money is invested.
This list just scratches the surface, as it doesn't include performance-related information (returns, benchmarks, and other metrics) or transactional data (trades, fees, expenses, and more). Imagine making heads or tails of all this presented as rows and columns of numbers and characters.
Of course, that's what investors and their clients had to make do with in the old days. Today, we're all used to presentations of big data sets with powerful analytics that are much easier to understand and interact with. In other words, we benefit from data presented in a human-centered user interface.
The benefits of creative data visualization
While today's data visualization systems are a boon for investment managers and asset management firms, they're also good for their clients. In fact, creative data visualization has a multitude of benefits for both sides of the partnership.
Visual representations make complex concepts like risk exposure, diversification, and performance vs. benchmarks much easier to understand. This makes for a more intuitive and agile experience throughout the investment and reporting process.
Compared to text-heavy reports or spreadsheets, investors and clients are better able to identify the trends, patterns, and anomalies that are so common to asset management. Correlations not easily spotted in tables become apparent with visually compelling representations.
Create visualization applications also provide a method to drill down and dig deep into large data sets. This leads to a better understanding of large and complex data sets. Working together, clients and investors make better, more informed decisions. And the more clients understand their investments and participate in the process, the more they trust their asset management firm, fostering better investor-client relationships.
Investment managers can even walk clients through "what-if" scenarios, as visualization models allow them to sit down with clients and experiment with different strategies. When clients see visual representations of market trends, spotting risks and previously undiscovered opportunities becomes easier.
Then, there's the improved risk assessment that comes with these insights. Asset managers see the fluctuations in a client's portfolio that might otherwise be hidden in rows of raw data. Conversely, risk metrics are identified more efficiently, enabling asset managers to make better investment decisions. Visualizations help highlight volatile assets before problems become readily apparent, allowing the clients to understand complex market factors quickly.
The challenges of human-centered UI large data sets
Despite all their benefits, creative visualizations can fall into the same traps as their reporting predecessors. Too many charts, graphs, 3D models, and other visuals can lead to cognitive overload, just like pages of tabular data or multi-tabbed spreadsheets.
This comes down to the challenges of designing a human-centered UI around large data sets. Researchers in the fields of computer science and design are well aware of the issue. An academic study published in 2023 points out several common challenges in big data visualization projects, including:
Too much information without context is difficult to understand.
Expert designers often lack domain knowledge, leading to confusing data presentations.
Visualization apps hit scalability issues as data sets grow.
Designers may be unaware of data privacy regulations and concerns.
All of this is symbolic of "the curse of choice," a problem all UI designers face. It's easy to fall into the trap of endless visualization styles. The impact of too much choice is, ironically, an inability to make decisions instead of quickly finding a clear choice.
Working with large data sets—and that's what all investment portfolios are—is a balancing act. Designers and application developers who work on the back end must toe the line between pattern recognition and overload. Human brains are great at spotting patterns in visual representations, but there's a limit.
Best practices for overcoming these challenges
Ultimately, a functional, human-centered UI, when based on complex financial data, is all about avoiding that limit and finding the perfect balance. To clearly present things like price movements, performance history, and risk metrics, designers and developers can follow some visualization best practices, including:
An agile approach to data consolidation, prioritizing data quality and privacy regulations along the way.
Understanding the audience and the creative visuals that will appeal to them.
Avoiding clutter and adopting a "less is more" approach to prevent information overload.
Filters, data segmentation, and the ability to drill down into large data sets so that the correct amount of data is always displayed.
These approaches prioritize clean visuals in uncluttered layouts, without visual elements that don't add informational value. The only valid approach to visualizing complex financial data is breaking it into smaller pieces—but with visual cues like color, size, and shape, which help users subconsciously spot the critical data points.
Building on these design practices ensures all information is valuable and not just pretty. Form follows function, making all information valuable and inviting users to drill down further.
Here’s an example of a snapshot report that aggregates investment data across various strategies, types, sectors, and regions—designed by Codal for a global asset management firm:
Creative data visualization solutions with Codal
Creative data visualization is quickly becoming the standard method for interpreting large and complex data sets. The information overload that used to be part and parcel of the asset management industry is now giving way to intuitive visuals, making complex information more accessible and easier to understand and improving investment decisions.
However, to make visualization applications accessible and intuitive, designers and developers must understand the data they're working with and the processes that generate it. For asset management visualizations, that means you need a partner who understands the logic of investment data and how to present it properly. That's where Codal comes in.
Codal is a full-stack enterprise design and development consultancy that specializes in modernizing business solutions with cutting-edge UX/UI design, data analytics, and AI solutions. We've partnered with major financial institutions, such as GCM Grosvenor and Charles Schwab , to create fast and intuitive solutions.
Codal creates innovative digital solutions from scratch and makes the old ones new again to solve today's complex business problems. With Codal, intuitive and impactful user-centric designs come with all our work.
