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