1.
DATA & ANALYTICS
Data Leaders vs. Data Laggards
How the investment industry is — and isn’t — harnessing
the power of data and analytics.
Featuring highlights of the State Street 2013 Data and Analytics Survey conducted by
the Economist Intelligence Unit

2.
DATA & ANALYTICS
How Big is “Big Data”
• 2.5 quintillion bytes of data are created every day.1
• Global IP traffic is projected to reach 554 billion gigabytes per month by the end
of 2016. 2
That’s more than 110 times all of the information
estimated to have been created — ever — until 2003.
1‖Customer
2Global
Analytics Pay Off,‖ IBM, January 2012.
Cloud Index; cited in Transforming Experiences, from Devices to Datacenters, Intel, April 10, 2013.
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3.
DATA & ANALYTICS
About the Research
A global survey of more than 400 asset managers and institutional asset owners on investment data
and analytics, conducted by the Economist Intelligence Unit on behalf of State Street (August and
September 2013).
Respondents by Region
Respondents by Type
8%
20%
33%
8%
34%
16%
18%
19%
11%
33%
North America
Europe
Asia Pacific
 Diversified Asset Managers
 Traditional Asset Managers
 Alternative Asset Managers
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
 Banks
 Insurers
 Pension Funds
 Other
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4.
DATA & ANALYTICS
Disruptive Industry Trends Require a Rethink of Data Strategies
Issues Most Likely to Drive Change in Data Strategy Over Next Three Years
Asset Owners
Asset Managers
(Top three issues cited)
(Top three issues cited)
More stringent risk
More stringent risk
management standards
management standards
Growing volume of
Growing volume of
trading data
trading data
Expansion new
Expansion into into
new regions
regions
38%
34%
33%
Increased demands
Increased demands
from regulators
from regulators
Competitive pressure
Expansion into new
Expansion into
asset classes
new asset classes
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
37%
35%
33%
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5.
DATA & ANALYTICS
The Industry is Investing Heavily to Keep Pace
% Change In Investment into Data and Analytics Over Past Three Years
2%
11%
1%
11%
Significantly increased investment (>20%)
Slightly increased investment (1-20%)
Made no change
Slightly decreased investment (1-20%)
75%
Significantly decreased investment (>20%)
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
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6.
DATA & ANALYTICS
Data and Analytics Capabilities are a Priority for Institutional Investors
Data is the Key to Addressing a Wide Range of Strategic Concerns
1%
8%
37%
• Nine out of 10 institutional investors
view data and analytics as a high
strategic priority
• For 37 percent, data and analytics as
the most important strategic priority
54%
Most important strategic priority
High strategic priority
Mid-level strategic priority
Not a strategic priority
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
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7.
DATA & ANALYTICS
Transforming Volume into Value
Top Challenges Related to Investment Data and Analytics
Accuracy of data
37 %
Lack of integration between different
data sources and types
34 %
Timeliness of data
34 %
Ability to customize data to suit different
end user needs
31 %
Ability to extract broader themes and
forward-looking insights from data
29 %
Increased volume of data
29 %
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
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8.
DATA & ANALYTICS
The Industry is Polarized by its Approach
Data is a competitive asset …
But few know how to use it
• 66 percent believe data will be a key source
of competitive advantage in the future
• Only 29 percent of firms are reaping the full
benefits from their data and analytics
capabilities today
• 86 percent increased investment in data
infrastructure in the past three years
An Industry
Divided by Data
• Our research reveals that a capability gap
is opening up between data leaders and
data laggards
1. ―Data Leaders‖ – Companies in the survey whose data and analytics are
already a source of competitive advantage
2. ―Data Laggards‖ – Have yet to gain full benefit from their data
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
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9.
DATA & ANALYTICS
Data Leaders are Better Prepared for the Challenges Ahead
Leaders
Data leaders are more confident in ...
Laggards
% confident in capability

70%
• Generating forward-looking insights
from data
42%
72%
• Integrating risk and performance analytics
50%
• Optimizing their electronic trading strategies
By contrast, data laggards are …
• More likely to get distracted by the
complexity of data management
X
64%
53%
% agree with statement
7%
30%
• Less likely to feel their data capabilities are
keeping pace with the growth of their
business
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
92%
50%
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10.
DATA & ANALYTICS
Five Steps to Go From Laggard to Leader
1. Improve risk tools with multi-asset class capabilities.
•
Integrated risk and performance analytics
•
Risk and analytics tools that have multi-asset class capabilities
•
More holistic, flexible and actionable risk tools
•
Factor-based risk systems
Risk analytics is an area where fewer institutional investors
express confidence in their capabilities, as portfolios grow more
complex and diversified.
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11.
DATA & ANALYTICS
Five Steps to Go From Laggard to Leader
2. Develop better tools to manage regulation in multiple
jurisdictions.
•
Systems that are supported by up-to-date regulatory expertise
•
Systems that include rule-sets to help manage compliance requirements
•
Customizable reporting tools integrated with the necessary databases
Approximately one-third of respondents emphasize the
importance of being able to extract insights from multiple data
sources and the need for flexible, modular systems that will
grow with the business.
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12.
DATA & ANALYTICS
Five Steps to Go From Laggard to Leader
3. Improve the ability to manage and extract insight from
multiple data sources.
•
Create data warehouses to integrate multiple databases and sources into a ―single
version of the truth‖
•
Use advanced analytics to find new ways to extract insight from overwhelming
amounts of data
•
Developing efficient processes to capture, clean and transform data, together with
the right governance to assure data integrity
Integration issues are often the key barrier to preventing
investment firms from achieving their goals with data. They are
also one of the biggest frustrations with traditional vendor
solutions.
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13.
DATA & ANALYTICS
Five Steps to Go From Laggard to Leader
4. Optimize electronic trading platforms.
•
Better integrated electronic trading platforms.
•
Need for integrated OMS/EMS and multi-asset class trading platforms.
•
Need for products/services that can support trading and clearing needs with
regulatory changes.
When asked where they will spend more money, respondents
highlighted order management and execution management
systems (cited by 86 percent of respondents) and portfolio
optimization tools (76 percent of respondents).
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14.
DATA & ANALYTICS
Five Steps to Go From Laggard to Leader
5. Develop a scalable data architecture that will grow with your
business.
•
Technology with scalability to handle growth and diversification
•
Systems that support global reporting
•
Support for rapid product innovation
Institutional investors need a flexible data infrastructure that
can keep pace with evolving client needs and regulations — as
well as flexibility to manage new asset classes, complex
mandates and offshore assets.
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15.
DATA & ANALYTICS
The Bottom Line
• Firms that develop the right data tools and strategies will be rewarded with
better insights, improved performance measurement and a deeper capacity to
understand risk across their global activities
• These advantages will be the edge that defines our future industry leaders
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This document contains certain statements that may be deemed forward-looking statements, which are based on certain assumptions and analyses made in light of
experience and perception of historical trends, current conditions, expected future developments and other factors believed appropriate in the circumstances.
© 2013 State Street Corporation
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