Are Buy-Side Firms Big on Big Data?

By Alexey Utkin

In this special guest feature for insideBIGDATA, Alexey Utkin, SVP of Financial Services Practice at DataArt, discusses how buy-side financial services firms are utilizing big data.

“In a reality of tough competition between buy-side firms, commoditized investment strategies, questionable performance in some sub-sectors (e.g. hedge funds industry has been under-performing market indices recently), we see more demand for innovative strategies, research and analytics, underpinned by technologies and solutions, associated with an umbrella term ‘big data’, such as data processing platforms, data lakes, semantic and graph databases, unstructured data and text analytics.

Investment firms showing consistently good performance are faced with a challenge of growing their business, namely assets under management. Investor relations and marketing are primary focus areas, with systems analyzing CRM data, combined with a wide range of new data sets including media and social networks to derive high priority investors and leads. These are all areas where big data analytics technologies are often involved. Buy-side firms also see that data is a valuable asset. As the data management function matures, it gets more recognition from business stakeholders. Ever growing regulators’ and investors’ demand for timely, accurate and granular reporting, as well as the ability to handle multiple delivery mechanisms, certainly plays a role here.

…We are seeing success in early applications of big data to buy-side, and even see some cases being productized by software vendors. As big data and analytics technologies mature, they will become more accessible, stable and cost-efficient. Although most of the drivers mentioned in the article, can be addressed with traditional data technology stack within buy-side firms, there is certainly a case to be made for incorporating the best from the big data tech in the next generation scalable data platforms. These types of platforms will likely be required to level the playing field within buy-side.”

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