As large investment firms and asset owners turn more to big data, they are struggling with issues of data quality and integrating it into their own systems.
FactSet, an aggregator for financial institutions of over 100 data sources, including proprietary feeds, has launched Open:FactSet, moving from pure aggregation to a software-subscription model that is designed to eliminate the struggles of data overload.
“Many asset and wealth managers are struggling with wrangling all the data,” said Todd Hartmann, Boston-based senior director of strategy, content and technology solutions at FactSet.
Technology, particularly cloud, is making it possible to integrate data into asset managers’ systems. That’s because FactSet has a vast amount of data, with over 30 years of historical information. Cloud can make access to this data via subscription, allowing asset managers to pull what they want.
There are limits, depending on the nature of the underlying data.
For example, relational or semi-structured data is now cloud-ready, and FactSet is already plugged into providers such as AWS, Google, and Microsoft, as well as service companies like Snowflake that enable writing code on top of the storage and compute that cloud vendors offer.
This creates a lot of value for asset managers that are already beginning to rely on cloud vendors for accessing data. Real-time data is still a challenge, as the infrastructure isn’t ready to handle a lot of that. But even here, vendors like FactSet are pushing for change. “FactSet is now moving ticket exchange data to AWS,” said Bryan Lenker, Denver, Colorado-based director of content and technology solutions.
Cloud is also making it easier for data providers to remove a lot of the headaches around downloading data. Asset managers hire data scientists in the expectation they can produce amazing insights – only to be disappointed that these highly paid people spend most of their time simply trying to make sense of the data itself.
Data is packaged and tagged in all sorts of ways. Each source has its own way of identifying a given piece of information. This is true of core financial data, like regulatory filings, pricing, and M&A data. But the real challenge is with the explosion of alternative data, from geospatial imagery to mapping supply-chain relationships.
FactSet has responded with Open:FactSet, transforming simple aggregation into a business service. FactSet’s team maps every data point to a fundamental security identifier (a process called symbology) so that an investment firm accessing data via Open will find all of these sources are delivered in a standardized way.
Peter Davaney-Graham, head of Open:FactSet in New York, says the company applies this to third-party data partners as well, transforming Open into a marketplace.
“Quants can now spend their time adding value and helping asset managers and their clients focus on investment strategies,” he said.
This approach means that relationships among data can be understood quickly.
“Fundamentals, people, ownership – the data is all intertwined,” said Hartmann. “Historically, financial institutions manage databases independently across departments. For a multi-asset class investor, this becomes a problem. Data has moved from being an I.T. need to a strategic business focus.”