Group Co.
Understanding Your Data is No Longer Optional
Traders Magazine Online News, February 15, 2018
The story of financial services has always been traders seeking out more (and better) data faster than the rest of the market, and figuring out how to profit from it. Over the years, “data management” has evolved from semaphore flags to telegraph wires, telephone lines, ticker tape machines, Quotrons, automated data feeds and intelligent algorithms. But regardless of the method, the goal has always been the same: more, better, and faster data.
Today we are awash in more data than ever, as traditional sources get faster and new sources crop up that we couldn’t profitably mine before. As a result, the world of financial services is more data-driven than ever. The opportunity for deeper insights and better decision making has never been greater.
People, processes (operations) and technology have long been the key components a company needed to deliver a product or service; in human terms, these are the vital organs of the corporate being. Not surprisingly, therefore, corporations commit the vast majority of their resources to these functions. But while the proper functioning of these organs has always been essential to a company’s health, the data that they generate has evolved into its life blood.
This data has always been there, permeating the organization, its customers, its people, and its processes. But to be useful (and usable) in the new data economy, it needs to be systemically identified, captured, processed, transformed, and distributed efficiently. In fact, there is a growing correlation between how well firms use data and how well they can compete and adapt to the realities of the new marketplace. This is evident in the efforts underway all over the financial services industry to turn “unstructured” data into “structured” data, use machine learning and artificial intelligence to analyze it, and to integrate alternative data content in core operations and processes. Leveraging these new technologies and data sources increases the amount of usable data, which can help companies streamline and rationalize organizational processes, reduce operating risks and costs, and expand, customize and improve product and services.
Beyond internal consumption, companies are being increasingly challenged to productize and export their own data. There is a growing demand among clients for data that will seamlessly integrate into their own work processes, and make them more efficient. To capitalize on this demand, firms must understand first, that the data they produce is itself a “product” with independent value, and second, that they may be able to package their raw data into data products that will expand existing client relationships and create new commercial opportunities.
In practical terms, organizations need to treat data as an asset, and devote sufficient time and attention to understanding it and nurturing it just like any other asset. At the very least, organizations should augment existing skill sets and capabilities to add a data-focused perspective to their operating fabric.
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