As firms look to overhaul their data and analytics capabilities, they're finding that the cost can be daunting. But if they care about their survival, it's an investment that has to be made.
This week at a small gathering in The Modern restaurant at the Museum of Modern Art in Manhattan, State Street conducted a panel discussion with four of its top technologists to discuss the state of big data, data analytics and how State Street Global Exchange (SSGX) is looking to address these challenges for its clients.
The event was also used to highlight a new survey that State Street commissioned and which was conducted by the Economist Intelligence Unit examining data-related challenges facing asset managers and asset owners. You can read more about the survey here.
State Street CIO Chris Perretta and SSGX head Jeff Conway noted the importance of being able to capture and deliver massive sets of data, and the need for improved analytics. At State Street, this push toward improved analytics has been highlighted by a digitization program underway at SSGX.
They discussed the need to be fast with the firm’s data delivery and the need to develop analytics platforms that deliver "intelligent" results. They talked about the importance of hiring top-level programmers and developers to help in this development push. And they examined the necessity of having an expansive set of data sources.
The fact is that this kind of an undertaking is massively expensive. Poaching talent requires salaries with many zeros. Third-party data doesn't come cheap. Being fast and smart can downright bankrupt a firm that gets too ambitious.
As Perretta noted, just two years ago it was difficult to make a business case to the CEO, CFO and COO that they should invest large amounts of money in data infrastructure without easily calculated returns.
The regulatory environment has helped make the case—this much is true. And as risk systems have gained budgetary attention, so too has the argument that a data management overhaul has to underpin those platforms.
Convincing those in charge of the purse strings that a good data and analytics strategy can breed a competitive advantage is of utmost importance, according to Conway. Having an effective data and analytics strategy is expensive, but survival is at stake.
I've been to many of these events and we host numerous conferences throughout the year where C-level technologists discuss the need for strong investment in data-led initiatives. The challenge for them is balancing budgetary limitations with projects that can in the long-term deliver necessary improvements. It's a constant give-and-take that demands clear and measurable deliverables.
Business managers must come to the realization that this is now the cost of doing business. In an era of decreased sources of alpha, data analysis is the next competitive differentiator between what State Street called the data leaders and laggards.
‘Magic and Loss'
On behalf of the Waters team, I'd like to extend our deepest condolences to Michael Shashoua, our colleague and the editor of Inside Reference Data. Earlier this month, his mother passed away.
If you have a minute, it's worth reading Michael's tribute to his mom, who instilled in him the curiosity and inquisitiveness necessary to be a journalist.
Waters Wavelength Podcast Episode 97: C-Level Execs Talk Bitcoin, Fintechs, Cognitive Computing & Open-Source Tech
In separate interviews, executives from AQR, JPMorgan, Cboe and IBM discuss topics permeating the capital markets.Subscribe to Weekly Wrap emails
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