3 ways Snowflake is helping to transform investment data for State Street

Thank you for reading my latest article 3 ways Snowflake is helping to transform investment data for State Street.?

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Who are State Street?

State Street is a leading financial services company headquartered in Boston, Massachusetts. With a rich history dating back to 1792, State Street has established itself as a global institution specializing in investment servicing, investment management, and other financial solutions.

Known for its expertise in custodial banking, asset management, and financial technology, State Street plays a pivotal role in facilitating the smooth operation of financial markets, managing assets for institutional investors, and providing a wide range of financial services to clients worldwide.

The challenge for institutional investors

I recently partnered with a client to help define their data and analytics strategy for a large superannuation (known as pensions or retirement funds elsewhere!) firm. In basic terms they take their customer's money - people like me and you - and invest it in a range of asset classes over a period of time for hopefully! a good return.

Therefore, making data-driven decisions is paramount to understanding where to invest and move funds in a fast paced environment. They also have to adhere to financial regulations and reporting set by the regulator.

The data challenges this particular client faced at the time was not too dissimilar to many other organisations I've worked with across different sectors:

1. Data silos and shadow IT springing up across the business
2. Ungoverned data and related processes creating risks and inefficiencies
3. An abundance of labour intensive end user computing
4. No centralised data repository with clean data for accurate reporting and analytics

From a business standpoint these issues made it:

• Difficult to get a consistent view of the portfolio at a single point in time
• Hard to first make accurate investment decisions and secondly to conduct "what-if" scenarios to understand and quantify the exposure to various markets
• The timeliness and accuracy of data delivered to the business was inconsistent and made it difficult to conduct the most basic of reporting objects such as posting up to date unit prices for super funds to the website.

This client also had a long standing relationship with State Street who acted as the custodian. State Street provided a reporting solution based on Oracle which was hard to scale and maintain, and every time the client required new data to be added it came with a lead time and associated costs!

The Alpha Platform

State Street had recognised it needed to offer its customers a more modern and scalable solution and had been working on creating the Alpha platform based on Snowflake and Microsoft Azure.

Three forces drove State Street’s decision to build the Alpha platform (as summarised by Peter Cohen's article on Forbes):

• Demand for front-office functions. Clients wanted State Street to provide front-office trading services so it entered commercial software by acquiring Charles River Development for $2.6 billion in 2018.
• Need for better portfolio management. At the industry level, investment data for client reporting, risk analysis, and regulatory reporting was not being managed well
• Desire to make data available to State Street clients. There was a need to integrate State Street’s data into a data platform and make it available and meaningful to clients.

As you can imagine the Alpha platform was quite compelling to my client especially as they had entered the market looking for a modern cloud data platform.

The solution

The client opted to go with Snowflake initially for the data sharing capabilities and elastic scalability. This meant that instead of relying on slow and error prone file transfers they could seamlessly share data with the Alpha Data Platform allowing them to get their hands on the data they needed as soon as it became available.

Around the same time my client implemented Charles River for front office operations - presenting an even more compelling need to integrate with the Alpha Data Platform to get the majority of core data points needed to run the business.

As they were already using Power BI using a simple out of the box connector to use the data in their new Snowflake instance was straightforward to set up and configure.

Finally the quants in the business had to rely on a mishmash of unsupportive tools such as R studio, Jupyter notebooks and Python libraries all installed locally. The introduction of Snowflake opened the data to Snowpark - a set of libraries and runtimes in Snowflake that securely deploy and process non-SQL code, including Python, Java and Scala.

This approach allows for the data scientists to bring the logic to the data. Models can be written, trained and deployed on Snowflake using Snowpark leveraging the huge scalability and elastic compute of Snowflake without the need to physically transfer the data out of Snowflake and onto a local desktop or laptop machine.

Conclusion

In conclusion, the challenges faced by institutional investors in the realm of data management and analytics are not unique to any single organisation. We've seen firsthand how data silos, ungoverned data processes, and a lack of centralized data repositories can hinder decision-making, compliance, and operational efficiency. However, we've also witnessed the transformative power of innovative solutions like the Alpha platform based on Snowflake’s data sharing capabilities.

If you find your organization grappling with similar data and analytics challenges, we invite you to reach out to us. Whether you are a Head of Data, Chief Data Officer (CDO), or Chief Information Officer (CIO), State Street is committed to sharing our expertise and collaborating on solutions that can drive positive transformation within your organization. Together, we can unlock the full potential of data to make informed decisions, navigate complex regulations, and optimize your operations.

Don't hesitate to drop us a line to explore how State Street can help you overcome your data challenges and embrace a more data-driven future. Let's parter on this journey towards better data management and analytics together.

To stay up to date with the latest business and tech trends in data and analytics, make sure to subscribe to my newsletter, follow me on LinkedIn, and YouTube, and, if you’re interested in taking a deeper dive into Snowflake check out my books ‘Mastering Snowflake Solutions’ and ‘SnowPro Core Certification Study Guide’.

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About Adam Morton

Adam Morton is an experienced data leader and author in the field of data and analytics with a passion for delivering tangible business value. Over the past two decades Adam has accumulated a wealth of valuable, real-world experiences designing and implementing enterprise-wide data strategies, advanced data and analytics solutions as well as building high-performing data teams across the UK, Europe, and Australia.?

Adam’s continued commitment to the data and analytics community has seen him formally recognised as an international leader in his field when he was awarded a Global Talent Visa by the Australian Government in 2019.

Today, Adam works in partnership with Intelligen Group, a Snowflake pureplay data and analytics consultancy based in Sydney, Australia. He is dedicated to helping his clients to overcome challenges with data while extracting the most value from their data and analytics implementations.

He has also developed a signature training program that includes an intensive online curriculum, weekly live consulting Q&A calls with Adam, and an exclusive mastermind of supportive data and analytics professionals helping you to become an expert in Snowflake. If you’re interested in finding out more, visit www.masteringsnowflake.com.