New State Street Research Reveals More than Half of Institutional Investors Plan to Outsource Their Data Management by 2021
May 09 2018 - 9:30AM
Business Wire
Almost 50 Percent Consider the Lack of Integration between
Different Data Sources and Types to be Their Top Data Management
Challenge
State Street Corporation (NYSE: STT) announced today new
research, which reveals that more than half (60 percent) of
institutional investors surveyed plan to partly or fully outsource
their data management over the next three years. Currently, 52
percent conduct all of their data management functions in house,
however, by 2021, this is expected to fall to 36 percent with 15
percent aiming to fully outsource this function to an external
partner.
“Explosion in data complexity has fundamentally changed the way
asset owners and asset managers compete and operate,” said Subbiah
Subramanian, global head of State Street Global Exchange’s
data-as-a-service offering, DataGX(SM). “Today’s investment climate
requires an overwhelming amount of data, and as the lines between
front, middle and back office continue to blur, smarter data
management is absolutely essential for effective performance and
recognizing growth opportunities.”
More than half of survey respondents (57 percent) cite the
driver behind this change in data management as demands from
regulators. However, it also appears that data [management] is
rapidly becoming increasingly important to institutional investors
with almost one-third (30 percent) stating that the incorporation
of new information insights or alternative data into their
investment process will be one of the strongest opportunities to
help increase assets for their firm over the next five years.
In addition, almost half (46 percent) of respondents believe the
implementation of a better data strategy has improved the alignment
of their investment and risk teams; and 22 percent believe their
data and analytics capabilities have become their most important
competitive advantage.
Other key findings of the State Street research include:
- 43% of institutional investors consider
the lack of integration between different data sources and types as
the top data management challenge
- Five years ago, 91% of respondents said
they had all or most of the right talent in place to advance
investment data and analytics strategy.1 Today, this figure has
fallen to 60%
- Over the next five years, 43% of
respondents expect to rely on external partners as their source of
performance and risk analytics
- 68% of institutional investors feel
comfortable storing data on the cloud
“In an environment of increasing regulatory requirements, and
with low yields necessitating investors to look into alternative –
and often more complex – sources of alpha, it seems clear that
institutional investors will continue to prioritize data management
and analytics to make better investment decisions, meet regulatory
requirements, and gain competitive advantage,” continued
Subramanian. “It appears the natural and most effective next stage
of this technological evolution is for institutional investors to
partner with data and analytics specialists, allowing them to focus
on their core competencies.”
To access the full findings, click here to see State Street’s
data and analytics survey.
About State Street CorporationState Street Corporation
(NYSE: STT) is one of the world's leading providers of financial
services to institutional investors, including investment
servicing, investment management and investment research and
trading. With $33.30 trillion in assets under custody and
administration and $2.70 trillion* in assets under management as of
March 31, 2018, State Street operates in more than 100 geographic
markets worldwide, including the US, Canada, Europe, the Middle
East and Asia. For more information, visit State Street’s website
at www.statestreet.com.
*Assets under management include the assets (approximately $36
billion as of March 31, 2018), for which State Street Global
Advisors Funds Distributors, LLC (SSGA FD) serves as marketing
agent; SSGA FD and State Street Global Advisors are affiliated.
Investing involves risk including the risk of loss of
principal.
The information provided does not constitute investment advice
and it should not be relied on as such. All information has been
obtained from sources believed to be reliable, but its accuracy is
not guaranteed. There is no representation or warranty as to the
current accuracy, reliability or completeness of, nor liability
for, decisions based on such information and it should not be
relied on as such.
The whole or any part of this work may not be reproduced, copied
or transmitted or any of its contents disclosed to third parties
without State Street's express written consent.
This document may contain certain statements deemed to be
forward-looking statements. Please note that any such statements
are not guarantees of any future performance and that actual
results or developments may differ materially from those projected
in the forward-looking statements.
State Street Corporation, One Lincoln Street, Boston, MA
02111-2900.
© 2018 State Street Corporation - All Rights Reserved
2110013.1.1.GBL.PRExpiration date: 05/31/2019
1 State Street’s 2013 Data and Analytics Survey conducted by the
Economist Intelligence Unit
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State Street CorporationBrendan Paul, + 1
617-662-2903BPaul2@StateStreet.com@StateStreet
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