Big Data in Capital Markets: Expanding the Search for Big Ideas

by Bill Fearnley, Jr, January 24, 2013
Industry Trends
North America

Abstract

Capital markets firms process, consume, and produce massive amounts of digital data every day. Firms are always searching for new data to provide insights in the search for investment alpha and competitive differentiation. Big Data tools and technology can help firms capture, analyze, and visualize this data and glean new investment ideas.

In the report Big Data in Capital Markets: Expanding the Search for Big Ideas, Celent assesses the Big Data opportunity for hedge funds, broker-dealers, asset managers, and custodians. The report also provides insights as to how Big Data can help front, middle, and back office operations.

Celent believes there are four key drivers of Big Data in capital markets:

  • A drive to improve insights and statistical confidence.
  • A wealth of unstructured data and data that can’t be analyzed by traditional relational database systems.
  • Higher-speed / higher-volume analytics and visualizations to explain and explore.
  • Open source software and falling server and enterprise storage costs.

“Capital markets is an industry with vast amounts of data that needs to be processed in real time, providing the perfect context for investing in Big Data,” says Bill Fearnley, Jr., Senior Analyst with Celent’s Securities & Investments Group and author of the report. “Firms compete for information as they develop proprietary investment ideas and strategies, and they should embrace Big Data in order to gain new insights.”

This report examines the key steps involved in Big Data and provides an overview of Big Data technologies that can be used in capital markets. It then discusses how hedge funds, broker-dealers, asset managers, and custodians are using Big Data across their operations in the front, middle, and back office. The report also provides conclusions and recommendations for financial institutions and vendors.

This 25-page report contains five figures and eight tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Tylor Tourville
ttourville@celent.com
Tel.: +1 617 424 3284

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

1

Introduction

3

Three Key Steps

7

Demand Drivers for Investment

8

Multiple Types of Firms Are Investing
in Big Data

9

Front Office

12

Middle Office

15

Back Office

17

Conclusions and Recommendations

18

 

For Financial Institutions

18

 

For Vendors

19

Leveraging Celent’s Expertise

20

 

Support for Financial Institutions

20

 

Support for Vendors

20

Related Celent Research

21

Sign in to download reports and access personalized information