Enterprise Data Platforms: Evaluating Vendor Solutions

The financial services industry is among the most data driven of industries in the world. The pervasiveness of electronic trading has meant that capital markets firms both generate and act upon billions of time sensitive market related messages every day. Due in part to a more interventionist global regulatory regime, regulators are forcing market participants to reconsider their existing data management architectures and strategies. Current global governance and compliance rules require market participants to increase reporting frequency, which translates into increased data capture and management. Increased data volumes have put immense pressure on existing systems.

Data management is increasingly becoming the key differentiator to the future success of today’s capital markets institutions. The impact is not isolated to any one segment of the business. Compliance, risk management, marketing, client relationship management, and operating efficiency have all combined to push enterprise data management to the forefront of challenges facing financial enterprises. All of these functions rely upon the accumulation, proliferation, and accuracy of massive amounts of data to enable effective decision-making.

Institutions understand that the new objective is to deliver performance and responsiveness as fast and smart as possible. Within the capital markets, multiple silo’ed business groups such as risk, back and middle office operations, trading and compliance view the same information differently. This leads to material disputes about data quality, definitions, information storage, and control. Historical fiefdoms within the front, middle and back office has impeded institutional efforts to rationalize data management platforms, much to the detriment of the institution as a whole. Market events such as Flash Crash or the global financial crisis of 2008/09 have highlighted that accurate and timely data underpin the ability to assess risk more accurately and to trade more effectively. If you get the data right, anomalies are easier to detect and potential threats are easier to mitigate.

The need to analyze unstructured data sources has bought a 180-degree change in the way institutions view how data is store and analyzed. In fact, the need to combine and integrate various data sources has lead institutions to invest in significantly more complex data architectures. This has drastically influenced institutional spend and increased complexity, resulting in making data retrieval a more complex and unwieldy task.
Unfortunately, TABB Group’s research highlights that capital markets institutions are lagging behind in their efforts to upgrade data management platforms. The forerunner industries, including the telco’s, government/intelligence sectors, social media firms, energy and utilities industries have been utilizing high-speed enterprise data platforms to extend their business and drive profitability.

Capital markets firms, however, have been slower on the uptake. Furthermore, since the global financial crisis (GFC) of 08/09, financial institutions have been cautious in making the large investments in infrastructure necessary to enable enterprise level adoption of these types of platforms. Now, they do not have a choice. Upgraded data management platforms are key to creating key differentiators and generating alpha going forward.

This 18 Page TABB Group note – Enterprise Data Platforms: Evaluating Vendor Solutions” discusses the deeper issues and challenges facing the industry, and the latest trends. Furthermore, the note also describes in detail the forward-looking solutions that solve many pain points that institutions are currently facing. These new tools will be indispensable on the journey ahead, which is why we expect a heightened sense of urgency. This note highlights the initiatives of a number of the larger vendors in this space, including HP Vertica, IBM PureData, Oracle, MarkLogic, and SAP HANA.