On behalf of State Street, Longitude conducted a global survey of senior executives at investment organizations during October and November 2014. We asked them to self-assess their confidence and progress across six data capabilities, including infrastructure, insight, adaptability, compliance, talent and governance. The 400 respondents were drawn from 11 countries and included insurance companies, private and public pension funds, fund-of-funds, foundations, central banks, endowments, sovereign wealth funds and supranationals. One hundred asset owners participated in the survey.

1. The Innovator’s Journey:
Pathways to Data Dexterity
State Street 2014 Data and Analytics Survey
Asset Owners Insights
March 2015

2. 2 2 5
5
5
7
9
11
12
20
22
Hong Kong
Germany
South Africa
Singapore
Brazil
Australia
France
United Kingdom
Canada
China
United States of America
Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
State Street 2014 Data and Analytics Survey
2
About the Research
Asset Owners by Country (%)
On behalf of State Street, Longitude conducted a global survey of senior executives at investment
organizations during October and November 2014. We asked them to self-assess their confidence and
progress across six data capabilities, including infrastructure, insight, adaptability, compliance, talent and
governance. The 400 respondents were drawn from 11 countries and included insurance companies,
private and public pension funds, fund-of-funds, foundations, central banks, endowments, sovereign
wealth funds and supranationals. One hundred asset owners participated in the survey.
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3. Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Our Analysis Identifies Three Groups of Asset Owners at
Different Stages in the Data Journey
3
Data Starters
Companies at an
early stage in their
data journey
Data Movers
Companies actively
moving toward better
data capabilities
Data Innovators
Companies with
advanced data
infrastructure,
expertise and high-
quality data
governance
40%
38%
22%
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4. Data
Starters
Data
Movers
Data
Innovators
Infrastructure
• Incompatible
legacy systems
• Most data in
separate silos
• Separate
platforms for
different asset
classes
• Aggregation,
visualization,
other data
management
capabilities
upgraded
• Improved data
integration across
investment
portfolio
• Infrastructure &
tools fully
upgraded
• Silos broken
down
• Seamless
integration of
unstructured data
Insight Generation
• Limited ability to
generate
performance and
risk analysis
• Fragmented view
by asset class
• Ability to conduct
scenario & stress
testing across
portfolios
• Integrated view of
risk &
performance
across multi-
asset portfolios
Adaptability
• Capabilities take
much time &
effort to adapt to
any changes in
investment
strategy
• Capabilities can
adapt quickly to
support new
products or
investment
strategies
Compliance
• Systems struggle
to keep up with
existing
regulatory
requirements
Skills
• Data team can
manage data
collection and
basic analytics
functions
Governance
• Basic data
policies and
processes in
place, but
governance is
patchy; little
standardization
• Data gaps,
errors
identified;
cleaning under
way
• Coherent,
agreed
framework for
data
governance
• Reduction in
time to market
for new product
additions, or
new asset
classes
• Systems fully
compliant with
existing
requirements,
but slow to
adapt to new
rules
• Team can
manage data
collection &
integration;
some
capabilities to
perform &
manage
analytics
• Rich, partly
integrated
performance &
risk analysis in
individual asset
classes
• Ability to analyze
performance &
risk of wide range
of alternative
assets
• Excellent data
quality and
traceability
back to source
• Reporting
systems adapt
quickly to new
requirements
across global
footprint
• Regular flow of
insights;
smooth
interaction with
fund managers
• Team has fully
optimized data
management;
advanced
Insight
generation
• Large degree of
standardization
across internal
databases;
external
providers
aligned
• Strong
leadership on
data
governance;
policies &
processes
entrenched
throughout
Note: Above sequencing is illustrative only; milestones may be reached simultaneously or in other sequences.
Our Survey Benchmarked Companies on Six Paths
to Innovation
4
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5. Why Data Innovators Are Pulling Ahead of the Competition
5
The Innovator’s Advantage
1. Robust, tightly integrated data
infrastructure
2. Ability to join dots on data yields
new insights
3. Adaptive architectures meet new
business needs faster
4. Global solutions that are ready
for regulatory change
5. World-class data and
analytical talent
6. A sophisticated approach to data
governance
Key Characteristics
Marking Innovators
Apart
• Innovators see data and analytics as the
single most important strategic priority
• They invest more in technology — and
translate this into a competitive advantage
• They can take regulatory compliance in
their stride, so technology investments
focus on value-adding activity
• They are exploring cutting-edge tools
including big data and advanced analytics,
and hiring data scientists to drive
innovation
Why Starters Get
Stuck, and Movers
Have Further to Go
• Legacy systems prevent organizations from
gaining an integrated view of investment
data
• Weak data governance leaves these
organizations vulnerable to problems with
data integrity and security
• More than half these organizations fear
their systems will not keep pace with new
regulatory requirements
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6. 32
55
45
18
23
59
27
24
16
24
13
11
29
16
5
3
10
5
5
5
0
Reducing investment costs across your asset portfolio
Evaluating risk and performance across the entire portfolio
Optimising our electronic trading strategies
Extracting investable insights from a large volume of data
Managing multiple internal and external data streams in varying formats
Generating forward-looking insights from our data
Conducting comprehensive, accurate scenario and stress testing on our
investment portfolio
Starters Movers Innovators
Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Data Dexterity Gives the Innovators Much Greater
Confidence For the Future
6
Please Indicate the Level of Confidence You Have in Your Institution’s Current Data Capabilities in the
Following Specific Areas. (% of asset owners with high confidence)
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7. Investing in Data
7 Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research

8. Asset Owners are Investing More in Data and Analytics
8 Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Which of the following statements best describes your organization’s
investment in data and analytics capabilities in the past three years?
(% of asset owners)
73%Of asset owners report
growth of 5% or more in
the last three years
3
15
55
21
6
Investment has increased each year
by more than 20%
Investment has increased each year
by between 10% and 20%
Investment has increased each year
by between 5% and 10%
Investment has been flat, or increased
by less than 5%
Investment has remained flat or
declined each year
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9. 14
23
50
9
5
0
16
68
13
3
0
10
45
35
10
Investment has increased each year by more than
20%
Investment has increased each year by between
10% and 20%
Investment has increased each year by between
5% and 10%
Investment has been flat, or increased by less
than 5%
Investment has remained flat or declined each
year
Starters Movers Innovators
… But Innovators Are Investing at a Faster Rate
9 Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Which of the following statements best describes your organization’s
investment in data and analytics capabilities in the past three years?
(% of asset owners)
37%of Innovators have increased
investment in data
by over 10% each year
vs.
10%of Starters who raised
investment at the
same rate
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10. Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Adaptable Systems Are the Priority – But Talent and
Governance Is Also Key
10
In which of the following areas do you intend to prioritize investment in the next 3
years? (% of asset owners)
31
37
38
43
43
44
Analysis and visualisation of data
Data governance (e.g. clear policies, processes
and leadership)
Data infrastructure
Ability of data systems to keep pace with
regulatory requirements
Quality and availability of data talent
Adaptability of your data systems to new needs
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11. Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Innovators Will Outspend Their Peers Across a Broad Range
of Technologies
11
Over the next 3 years, what changes do you expect to the level of investment your institution makes in
the following types of technology or data? (% of asset owners)
32
18
27
23
55
45
41
32
29
29
26
29
39
34
21
18
33
18
18
13
13
13
20
8
Data management system
Accounting
Compliance/reporting
Portfolio modeling/ optimisation system
Electronic trading system
Performance analytics
Risk analytics
Order management / execution management systems (OMS/EMS)
Starters Movers Innovators
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12. Data Strategy and Challenges
12 Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research

13. 3
29
44
24
It is a low-level strategic priority (near the
bottom)
It is a mid-level strategic priority
It is a high strategic priority (near the top)
It is the most important strategic priority
Asset Owners Understand the Value of Data
13 Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
How do most senior leaders at your institution view the importance of
investment data and analytics relative to other major strategic priorities?
(% of asset owners)
“Our investment in
data and analytics capabilities
are a source of competitive
advantage for us”
19%
40%
Strongly agree
Somewhat agree
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14. Data and Analytics as
Their Top Priority
But Innovators Are More Likely to View This Area
as a Top Priority
14 Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
How do most senior leaders at your institution view the importance of
investment data and analytics relative to other major strategic
priorities? (% of asset owners)
41%
24%
Innovators
Movers
15% Starters
0
9
50
41
3
24
50
24
5
45
35
15
It is a low-level strategic priority (near
the bottom)
It is a mid-level strategic priority
It is a high strategic priority (near the
top)
It is the most important strategic priority
Starters Movers Innovators
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15. Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Risk Standards and New Asset Classes Drive Change
15
Which of the following are most likely to require changes to the way your firm manages investment data
over the next 3 years? (% of asset owners)
16
20
20
21
24
26
26
29
30
35
Growing volume of trading data
Increased demands from internal staff
Expansion into new regions
Increase in threats to cyber security
Electronification of trading
Competitive pressure
Increased demands from regulators
Increased demands from clients/investors
Expansion into new asset classes
More stringent risk management standards
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16. Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Half of Asset Owners Will Struggle to Cope With More
Regulation
16
55%
Which of the following statements best characterizes your expectations for regulatory reporting
requirements over the next 3 years? (% of asset owners)
3
15
49
33
Reporting requirements will ease
Reporting requirements will largely remain
unchanged from today
Reporting requirements will increase, and our data
capabilities will struggle to cope
Reporting requirements will increase, but our data
capabilities will cope adequately
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17. Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
But Innovators Can Keep Pace With Regulation
17
Which of the following statements best characterizes your expectations for regulatory reporting
requirements over the next 3 years? (% of asset owners)
0
9
18
73
3
11
55
32
5
23
60
13
Reporting requirements will ease
Reporting requirements will largely remain unchanged from today
Reporting requirements will increase, and our data capabilities will
struggle to cope
Reporting requirements will increase, but our data capabilities will cope
adequately
Starters Movers Innovators
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18. Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
Data Security is Paramount – As Is Accuracy
18
• 80% believe data security
is a key strategic issue
for the investment
industry
• Legacy systems, siloes
and plethora of providers
make improving data
accuracy a difficult
challenge
What do you consider to be the top challenges related to investment data and analytics overall for your
business today? (% of asset owners)
19
27
30
38
Ability to extract
broader themes and
forward-looking
insights from data
Timeliness of dataAccuracy of dataSecurity of data
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19. Governance Will Need to be Strong in the Highly
Complex Investment Data Environment
19 Source: State Street 2014 Data and Analytics Survey, conducted by Longitude Research
What are the toughest data integration challenges your
company faces? (% of asset owners)
55%“” “The complexity of
managing our data
distracts key employees
from the areas where
they should be
focusing most.”
19
20
22
25
25
27
30
31
38
Integrating legacy systems
Accessing external data
Cleaning data
Standardising data formats across
departments
Integrating unstructured data
Working with data warehouses that
are too slow
Cost of external data
Working with data from external
providers
Reconciling older data from multiple
departments
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20. How to Become a Data Innovator
 Break the “legacy trap” by replacing outdated systems that lock your data
in silos
 Learn how to exploit unstructured data to drive new sources of insight
 Integrate your analytics across the entire investment portfolio to spot new
investment opportunities and to identify hidden risks
 Embrace outsourced models and the cloud to become more flexible and
cost efficient
 Crack the compliance challenge with systems that can cope with global
regulatory changes
 Create compelling career opportunities for data scientists, and learn how to
knit them into existing teams
 Ensure data governance and security standards are understood by, and
entrenched throughout, the organization
20
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21. 21
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