State Street Corporation, one of the world’s leading providers of financial services to institutional investors, released its Vision Report today examining the impact of emerging technology on financial services and investing. The report, entitled “The Evolving Role of Technology in Financial Services,” looks at the impact of forthcoming advances in three specific areas: analytics, electronic trading and regulation, and portfolio allocation and modelling.
The report takes a look at the impact that next generation technology such as cloud computing is expected to have on the industry. According to the report, investors will see unparalleled benefit through greater automation and capacity on demand, accelerated time to market of innovative new products — including custom analytics and data — greater security and strengthened client service.
Current Tools Only Provide Investors with a Glimpse in the Rearview Mirror
State Street’s Vision report also explains that, unlike today, the financial services industry will soon deploy increasingly sophisticated, forward-looking technology tools and analytics that will enable investors to understand and model actual precursors of performance.
For example, instead of today’s simple descriptions related to risk position and market stability, investors will soon be able to see more acute and intricate insights and the actual factors that contribute to those risk positions. These factors alone, the report states, will have reverberating impacts on the habits, business processes and decision-making of institutional investors around the globe.
“A great transformation in financial services is well under way and global investors stand to reap tremendous benefits,” said Christopher Perretta, executive vice president and chief information officer for State Street. “Investors have always demanded more information, faster information, greater transparency and improved risk management. They will soon get their wish as forthcoming technology will enable them to slice, dice, process, manage and correlate data in ways that will give them exponentially greater value and security, enabling them to make better and more informed investment decisions than ever before.”
Specifically the report is broken into three main sections:
1. Technology with a Purpose: The Next Generation Today — Discusses the integration of risk and return
technology by investment service providers to address asset managers and asset owners’ growing need for
more detailed portfolio analytics, process transparency, risk management and dashboards to improve the
speed and kind of information they are receiving and their access to it.
2. Using Technology to Adapt to the New Regulatory Environment — Examines the review of electronic
trading by regulators following the start of the financial crisis in 2008. Technology has been at the forefront
in enabling the exponential growth of electronic trading and has become the only solution to effectively meet
the challenges inherent in new trading regulations.
3. Portfolio Allocation and Modelling — A Technological Arms Race? — Explores technology’s solutions
to meet today’s leading global asset management challenges, including market crowding, pricing
inefficiencies, risk and rebalancing.
