Investment's Internal Machine

Only 1/3 of Investment Organizations Have an Adequate Data Infrastucture

Markets drive need for 'data dexterity'

BOSTON–(BUSINESS WIRE)–A new global survey commissioned by State Street (NYSE: STT) of 400 senior executives at investment organizations reveals that while 81 percent view data and analytics as one of their top strategic priorities, only 37 percent have advanced data infrastructure, expertise and high quality governance in place.

The survey, titled “The Innovator’s Journey: Pathways to Data Dexterity” identifies three groups of organizations at different points of progress: Data Starters, who are just beginning their journey, Data Movers, who are making strides and Data Innovators, who are uncovering the real value of advanced infrastructure, expertise and high-quality governance.

“Effectively managing data is no longer optional, whether it’s big, fast or smart,” said Jeff Conway, executive vice president and head of State Street Global Exchange. “The opportunity to bring real value to data and analytics lies in plotting your exact point on the path to innovation. Organizations plagued by legacy systems, a lack of talent and weak data governance will miss the opportunity to extract investable insights from data without a clear vision.”

From Paralysis to Performance – Starters, Movers and Innovators

The survey found that for Data Starters, legacy IT issues and compliance pose major barriers to progress and outdated systems are making it difficult to get the full value of their data. Meanwhile, Data Movers are increasing their investments more rapidly by replacing legacy systems with new data architecture and applying tools for analyzing investment risks and performance of individual asset classes. However, despite being the group most concerned about regulation, only 20 percent plan to significantly increase their spending on compliance and reporting capabilities.

On the other end of the spectrum, Data Innovators recognize the value of data and analytics and are confident in the competitive advantage it brings. Innovators prize data quality and integrity and set high standards for data governance and security that are entrenched throughout the business. Additionally, they are acutely aware of the importance of insight generation and using advanced tools and techniques which enable them to conduct performance and risk analysis across investment portfolios, including alternative asset classes.

The survey found that:

  • Nearly half (49 percent) of Innovators see data and analytics as their single most strategic priority;
  • Thirty-eight percent have increased investment in data by more than 10 percent each year and are seeing a return on their investment;
  • Forty-four percent strongly agree that their investment in data and analytics is a source of competitive advantage, compared with only 15 percent of Movers and 5 percent of Starters.
Effectively managing data is no longer optional, whether it’s big, fast or smart

“Staying ahead in a fast-changing market will be as much about cultural change as about adopting new technology,” continued Conway. “Data Innovators who prize data as a strategic asset are investing in it, protecting it and getting value from it at every level of their organization. Regardless of being a Mover, Starter or Innovator, investment organizations need to focus on getting to the point with their data capabilities and building strong foundations — so they can gain a competitive edge in the high-tech investment model of the future.”

For the full report, please click here.

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About State Street
State Street Corporation (NYSE: STT) is one of the world's leading provider of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $28.19 trillion in assets under custody and administration and $2.45 trillion* in assets under management as of December 31, 2014, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street’s web site at * Assets under management include the assets of the SPDR® Gold ETF (approximately $27.3 billion as of December 31, 2014), for which State Street Global Markets, LLC, an affiliate of SSgA, serves as the distribution agent.