Investing
How to increase resiliency and agility to anticipate market volatility
Global Banking & Finance Review®
Company
By Tim FitzGerald, EMEA Financial Services Sales Manager, InterSystems
While we can’t quite predict the exact nature of market turbulence, one thing we can predict is that market volatility will occur with monotonous regularity.
The connected world in which we all live drives the markets. In recent years we’ve seen the impact of geo-political events, pandemics, elections, and disasters being felt with increasing frequency. Intraday numbers no longer cut it. For a financial services firm to be the most competitive, its people need to see and work off data in real-time. As a result, being able to anticipate and respond to sudden market changes has become increasingly important for financial services firms.
Consequently, many firms have been working hard to gain the capabilities needed to become more agile and resilient in the face of this ongoing volatility. With this, financial services organisations have become more aware of the role data, specifically fresh data, has to play in a landscape where things can change very quickly.
Yet, while they may be aware of the importance of fresh data in this context, the growing volume, velocity, and complexity of the data firms are dealing with often makes it difficult for them to access and leverage it in real time. Therefore, solving these challenges is going to be vital. At its core, this requires firms to not only bridge their data silos, but also to simplify their data architecture.
The impact of data silos
Currently, large numbers of financial services firms are burdened by siloed systems across multiple departments. This leads to data that is inconsistent, disparate, and difficult to interpret. Often, these organisations have also amassed overly complex data infrastructures that rely on a disjointed set of technologies for data management, semantic layers, data pipelines, data integration, and analytics, making it difficult to obtain information and insights in a timely manner.
All of this prevents firms from being able to get the insights they need to adapt to changing market conditions, capitalise on crucial business opportunities, comply with changing industry regulations, and gain an accurate understanding of risk and decisions related to financial data. In other words, it severely impacts their agility and resiliency. Ultimately, it is far simpler for these organisations to have a system that is easy to understand, use and adapt, rather than trying to navigate hundreds of different applications dispersed across many locations.
Implementing a modern data architecture
Fortunately, bridging data silos to overcome these challenges is no longer as complex as it once was. This is possible through the use of a unified data platform to power a smart data fabric – a new architectural approach which speeds and simplifies access to data assets across the entire business. The technology accesses, transforms, and harmonises data from multiple sources, on demand, to make it usable and actionable for a wide variety of business applications.
Meanwhile, embedded analytics capabilities within such a platform, including data exploration, business intelligence, natural language processing, and machine learning, make it faster and easier for firms to gain new insights and power intelligent predictive and prescriptive services and applications.
As well as simplifying their data architecture, implementing a unified data platform allows existing legacy applications and data to remain in place, helping firms to maximise the value from their previous technology investments, including existing data lakes and data warehouses, without having to “rip-and-replace” any of their existing technology.
Getting ahead of new opportunities
By incorporating real-time transactional data and eliminating delays in accessing data stored in production applications and data silos, business leaders will be able to make decisions based on accurate and current data, not data that is weeks old. This will eliminate errors and prevent any future business opportunities from being missed.
Armed with a much-needed consistent, accurate, real-time view of the data they need to run their business will enable firms to make more informed and better decisions, as well as giving them the resiliency and agility to anticipate and adapt to changing market conditions. This complete 360-degree view of both their business and their customers will also put financial services firms in a position to better capitalise on crucial business opportunities, comply with changing industry regulations, and gain an accurate understanding of risk and decisions related to financial data.
Ultimately, amid continued market volatility, it will empower financial institutions to turn their data into an enabler, ensuring that they are no longer on the backfoot when spikes occur, and can instead continue to move their businesses forward during times of uncertainty.
Market volatility refers to the degree of variation in trading prices over time. It indicates the level of uncertainty or risk in the market, impacting investment decisions.
Data silos are isolated data repositories that are not easily accessible or integrated with other data sources. They can hinder effective data analysis and decision-making in organizations.
A unified data architecture is a framework that integrates various data sources and systems within an organization, allowing for seamless access and analysis of data across departments.
Real-time data is information that is delivered immediately after collection, allowing organizations to make timely decisions based on the most current information available.
Risk management involves identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events.
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