By Sam Sundera, Head of Future Business, SIX
As the dust continues to settle post the 2020 presidential election, financial institutions are left asking themselves: where are the business risks in the medium to long term? Will firms with global operations find themselves navigating through an increasingly sanctioned environment as relations between US and China continue to sour? What will the new administration mean for Wall Street and the US financial sector?
In the wake of all this uncertainty, it is clear that the time for financial firms to act is now. Right now, they should be asking themselves if their current operations and technology allow for speedy on-boarding of new data types and if they can efficiently shape, aggregate, and make sense of data sources faster than their competitors. Having the capabilities to do so will enable them to mitigate risks, crucial amidst a contested presidential election.
Data is, unquestionably, the new frontier for financial institutions. Much like in the space race which dominated during the 1950s – 1970s, when global superpowers competed to become the first to capitalize on the final frontier, financial institutions are now competing against each other in the race to capitalize on data. Firms across the globe are looking to explore this new source, racing to make the most of the opportunities it presents and utilizing it to beat their competition.
Alternative data can prepare for the short and long-term implications of the world’s most closely watched political event, as voter polling data pours in from across the country.
However, in order to reduce any potential risks associated with adopting new data sets, a financial institution has to be grounded in historical trend-based analysis as well. The US has been here before.
In the financial sector, firms were unsure of what was to come from the bipartisan results and that’s where we find ourselves now, looking at both sides of the coin, trying to recast the past for clues. Looking back at what the data showed around the impact of past economic and geopolitical events on markets, will provide better insights to better grasp what might happen in the very near future.
At this pivotal point in the history of global markets, with geopolitical, health and economic risks rife, now is not the time for financial institutions to put the integrity of their data infrastructure in the hands of a utility trying to keep its financial head above water during this “new normal.”
International pressures are so vast that stakeholders cannot afford to wait for answers tomorrow. Shareholders and customers are seeking out fresh thinking and thoughtfulness to drive opportunities for growth, while also relying on stability, clarity, and certainty to navigate themselves through challenges. The outcome of this election will be felt for generations to come, and there is so much at stake in the financial sector. In order to navigate throughout these times of change, proven data capabilities are required to ensure continuous innovation and delivery to truly transform today’s complex financial system.