Financial market infrastructure (FMI) players are thriving as unprecedented regulatory pressure and technological advancements drive up the quality and quantity of industry data – and FMI revenues.
It’s now a data-driven industry – and FMI players are primed to take advantage. They have the opportunity to transition from keepers of record to custodians of deep industry insight. But having a robust information and data strategy is essential in making it happen.
The insight journey
With so much data flowing through the industry, new challenges are coming to the fore. FMI players not only have to process vastly more data – and faster – they also have to support a host of different data formats, both structured and unstructured.
What’s more, as they shift their focus toward generating data-driven insights to create new business and client value, FMI players are exploiting a wider range of digital technologies. In fact, maturing cloud, Big Data, analytics and artificial intelligence solutions are becoming “must have” capabilities in the quest for data insights.
FMI providers can use this opportunity as a call to action to make a fundamental transformation in their value proposition for clients. That could cover any or all of the following:
- Identifying key trends to help clients find market gaps and launch new products.
- Managing and improving client relationships by providing new insights about their stakeholders.
- Acting as trusted advisors by providing accurate information for pre-IPO advisory.
- Enhancing internal processes through automation and artificial intelligence.
Don’t delay – but keep eyes on the road ahead
A robust information and data strategy is essential in providing the killer insights that these new roles rely on. That strategy needs to support both early moves to capture low-hanging fruit, as well as the longer-term roadmap.
The first step in this journey is defining a strategic information strategy. This identifies the critical information required to run your business and is key to unlocking value from information. Completing an information strategy will provide the basis on which information can be exploited across the business. It could help to get you:
- Prioritized delivery of the information and data required to enable change.
- A holistic view of critical business information.
- Immediate business value through “deep dives” into targeted areas aligning with currently planned activities.
In the short-term, data quality issues need not delay a data insight journey. Look for the key insights that can be derived from the organization’s current state. These may not be immediately obvious, but with the right culture and the right information, quick wins are almost always possible. Start by identifying the insights, and the underlying data, that can best meet business needs. Then develop an agile culture to encourage the rapid prototyping of proofs of concept.
Lastly, look for innovative ways to source data, such as using social media to spot cross-industry trends or perform sentiment analysis on industry news. Use the proofs of concept to instill a data-centric culture and get buy-in from senior stakeholders.
On the journey, there are a series of key “dos” and “don’ts” to bear in mind:
|Do use available data to understand your clients better. Analyze their business needs and ensure your conversations are data driven.||Don’t assume your clients know what’s best for them. Analyzing their behavior will often reveal needs they hadn’t realized.|
|Do invest in analytics tools. Licenses can be expensive, but allowing teams to experiment is critical to identifying new opportunities.||Don’t zero-in on a single tool. There is likely no one size to fit all use cases. Use the appropriate tools for the needs of your business teams.|
|Do assume that data volumes are going to increase. Define a data strategy, including a cloud migration, and invest in the future (e.g. quantum computing).||Don’t spend millions of dollars storing or processing data for the sake of it. Analyze existing data storage and flows to see where costs can be cut.|
|Do tap into unique data sources to gain competitive advantage. There’s a wealth of free information that can be combined to form detailed insights.||Don’t assume you have to pay for every data source. They won’t all be useful and there might often be other ways of finding the information.|
|Do ensure clients can easily access necessary insights through an easy-to-use portal. This can also be used to analyze what data they’re using most – and how.||Don’t overload clients with information. Offer too much and it won’t be used. Customize where possible – and continuously assess how it’s being received.|
Ultimately, in becoming a successful custodian of industry insights, it’s essential to always keep sight of the business value and objectives. The temptation to innovate for innovation’s sake must be avoided. But with a clear sense of evolving client needs and future revenue opportunities, the right data used in the right way will open up a new world of value for market infrastructure businesses.