Majority of capital market firms don't have Big data strategy: Study

Respondents cite inadequate technical knowledge as the most commonly encountered challenge during a big data project, highlighting the need for appropriately skilled staff to implement such a strategy.

FP Staff August 13, 2014 15:46:26 IST
Majority of capital market firms don't have Big data strategy: Study

Over the last decade, the concept of big data has been applied to a whole host of industries but the capital markets have been relatively slow to adopt these strategies, revealed a study commissioned by Thomson Reuters and produced by Aite Group.

"Within the financial services sector, big data has gained far more traction within retail banking due to the increasing desire of these financial institutions to profile their customers in a similar manner to early adopters of big data such as Amazon or Google," the survey stated.

Majority of capital market firms dont have Big data strategy Study

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"On the institutional side of the capital markets, on the other hand, there has traditionally been far more customer stickiness; hence there has been less incentive to apply big data in this manner."

The paper, 'Big Data In Capital Markets', based on surveys with 22 capital markets firms conducted during the months of May and June 2014, reported that the majority of firms active in the capital markets do not have a big data strategy in place at an enterprise level.

Only 5 percent of the 423 firms contacted felt they had enough knowledge of the subject to participate or were willing to talk about their big data programmes (some feel it is too commercially sensitive an area to discuss) - most firms implementing big data are doing so in specific functional areas, such as sentiment analysis or market surveillance.

Half of respondents have invested in big data already. Most firms that have implemented a big data project hail from the banking and hedge fund communities, though a handful of asset managers have invested in such projects, the report said.

Additionally, half of respondent firms either currently employ or plan to hire a data scientist in the next 24 months, correlating directly with these firms' use of big data.

"The aspects of most importance to respondent firms in terms of big data deployments signal that actionable information and insight are equally pegged with scalability for future data volume increases."

Respondents cite inadequate technical knowledge as the most commonly encountered challenge during a big data project, highlighting the need for appropriately skilled staff to implement such a strategy.

As more capital-market-specific use cases for big data become prevalent in the market, firms will become more comfortable with these strategies, the survey highlighted.

Current investments in big data are largely focused on revenue generating opportunities in the front office, but the future is likely to see much more focus on client retention, compliance function support, and enterprise risk management and governance.

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