“Innovation isn’t a 'nice to have', it’s a necessity”, according to Julia Streets, founder and CEO of Streets Consulting Limited.
Streets made the comment at SimCorp Investment Summit last month in London, where she delivered a state of the union keynote on life after the second Markets in Financial Instruments Directive (MiFID II). Her comments are now part of a question and answer SimCorp blog.
Streets indicated that change is also “being driven by a desire for efficiency that can give firms a competitive edge in a highly competitive world”.
She said: “This is about doing what you do today, but better and data is a large part of that. The agenda is once again about becoming fit for growth and capable of scaling. Thriving not just surviving.”
Streets was asked, amid the backdrop of growing volumes, whether data is becoming too big a beast for today’s buy side operations.
Of which she answered: “All of this comes back down to how you manage data. Some firms are embracing the digitalisation journey, where they are investigating innovation including artificial intelligence (AI), to help manage and normalise data processes.”
Streets went on to explain: “Is there still a reticence, a hesitancy for some, towards cloud data management? Yes, but there is no denying that it is fast becoming a crucial element when it comes to alpha generation, whether that’s enriching and unlocking data analytics at speed and scale or identifying trading patterns and creating new lines of business.”
Concerning technology, Streets surmised that AI is still in the “fairly early stages of consideration.”
She added: “There are buy-side firms harnessing such technology for better insights. On the sell side, many firms are already using AI for fraud, compliance and trade surveillance. Regulators are now looking at AI too, to manage their data.”
Concerning the cyber risk synonymous with technology, Streets warned: “This is at a time when we are seeing increasing attempts of cyber attacks.”
“All institutions including tier two and three investment firms, not to mention wealth management firms managing the assets of high net worth individuals, should be on high alert.”
She added: “I was reading a report just recently where only 15 percent of the buy side participants asked, were confident about their ability to tackle cyber risk. If we are to tackle this head on, cyber security must be heeded as an organisationally aligned approach to threat management.”
“Already the preserve of boardroom executive responsibility, cyber reporting and regulation is fast climbing to the top of the agenda.”
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