BANKS AND BUY-SIDE FAILING TO ACT ON BENEFITS AND OPPORTUNITIES OF BIG DATA

  • Siloed approach to handling Big Data limits the potential benefits it can bring
  • The increasing volume and nature of data that flows through banks is challenging their traditional data management systems
  • Embracing Big Data offers banks the ability to reduce margins of error in investment decision making and realise a new level of operational organisation

A new two-part report from GreySpark Partners, a leading global capital markets consulting firm, shows that financial firms on the buy and sell-side are failing to effectively use Big Data technology to their advantage.

Examining how Big Data technology is being used by banks and other types of financial institutions in 2016, the two sections of the study – respectively Big Data Technology in Investment Banking, and Big Data Use Cases in Financial Services – claim that, while Big Data solutions are increasingly being deployed by the companies to manage the voluminous amounts of structured and unstructured data that they hold, many of them are not using the technology effectively.

At issue is the traditional, siloed approach to managing the client, market and proprietary data held by asset managers, banks, institutional investors and trading firms. Over time, as capital markets interactions became increasingly electronic in nature, the size of these data silos have increased to reach unmanageable levels for many of the companies from an organisational perspective. Thus began a trend of so-called desiloisation, which – over the last five years – has seen many companies move toward integrating their data repositories across their organisations.

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Big Data technology platforms were developed to aid companies in the management of data that is both structured and unstructured (i.e. such as textual data), and thanks to their ability to ingest, store and process the reams of information held by organisations, can create significant competitive advantages for companies that use them.

However, GreySpark’s research reveals that the financial and organisational benefits that banks and buyside firms can gain from using Big Data platforms are diluted if the system is not implemented across the company. In order to fully realise the potential benefits generated by Big Data systems, organisations need to take a more holistic and cohesive approach to the technology, which will deliver both cross-departmental cost savings and boost revenue generation.

GreySpark identified nine use cases for Big Data technology, which can be employed by different functional areas of a financial institution. Implementations of all nine use cases, including using the technology to inform strategic decision making, to protect against reputational damage and to reduce customer churn, are already in play individually for a range of financial institutions.

Rachel Lindstrom, GreySpark senior consultant, said: “In many cases, the benefits of Big Data implementations can only be fully achieved with a change of culture across the financial organisation. Successful Big Data project implementations consider how the technology can be used across a firm, facilitating Big Data usage in various environments and for a number of different purposes. GreySpark believes that such Big Data implementations can deliver financial benefits as a result of easier information sharing across an organisation as well as the analysis of more data and more types of data.”

For further information on GreySpark’s research, please visit: http://research.greyspark.com or e-mail: [email protected]

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