A new report from State Street Corp has found that current financial services tools and investing technology only provides investors with a glimpse in the rearview mirror. What they need is something that that will help them with the future.
The study, 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.
“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.”
The report also studies the impact that future technology such as cloud computing is expected to have on the industry. The report predicts that investors will see unparalleled benefits 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.
The 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.
The report focuses on three key areas. It 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.
The report also 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. And, it explores technology’s solutions to meet today’s leading global asset management challenges, including market crowding, pricing inefficiencies, risk and rebalancing.