In an age where asset owners and managers face vast amounts of data, two distinct groups are emerging. The data leaders are using smart data strategies for valuable insights and a competitive edge, while the laggards struggle to master data complexity. There are key strategies these institutional investors need to go from laggard to leader – and pull ahead of the pack.

1. DATA & ANALYTICS
Leader or Laggard: How Data Drives Competitive
Advantage in the Investment Community
Featuring highlights of the State Street 2013 Data and Analytics Survey
conducted by the Economist Intelligence Unit

2. DATA & ANALYTICS
About the Research
A global survey of more than 400 asset managers and institutional asset owners on investment data
and analytics, conducted by the Economist Intelligence Unit on behalf of State Street (August and
September 2013).
Respondents by Region
Respondents by Type
8%
20%
33%
8%
34%
16%
18%
11%
33%
North America
Europe
Asia Pacific
 Diversified Asset Managers
 Traditional Asset Managers
 Alternative Asset Managers
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
19%
 Banks
 Insurers
 Pension Funds
 Other
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3. DATA & ANALYTICS
Disruptive Industry Trends Require a Rethink of Data Strategies
Issues Most Likely to Drive Change in Data Strategy Over Next Three Years
Asset Owners
Asset Managers
(Top three issues cited)
(Top three issues cited)
More stringent risk
More stringent risk
management standards
management standards
Growing volume of
Growing volume of trading
trading data
data
Expansion new
Expansion into into
new regions
regions
38%
34%
33%
Increased demands
from regulators
from regulators
Competitive pressure
Expansion into new
Expansion into
asset classes
new asset classes
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
37%
35%
33%
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4. DATA & ANALYTICS
The Industry is Investing Heavily to Keep Pace
% Change In Investment into Data and Analytics Over Past Three Years
2%
11%
1%
11%
Significantly increased investment (>20%)
Slightly increased investment (1-20%)
Made no change
Slightly decreased investment (1-20%)
75%
Significantly decreased investment (>20%)
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
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5. DATA & ANALYTICS
Investment is Targeted at Decision-Making in the Front Office
How Investment Will Be Prioritized Across a Range of Data Tools
Order Management Systems/
Execution Management Systems
• Decision-support for the
front office becomes a
priority
34%
53%
46%
Performance analytics
43%
28%
Benchmark data
• Need to move closer to
real-time information
Portfolio optimization
43%
27%
Risk analytics
39%
Slight increase
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
30%
24%
Significant increase
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6. DATA & ANALYTICS
Data and Analytics are Now a Firm Priority for Institutional Investors …
Data is the Key to Addressing a Wide Range of Strategic Concerns
1%
8%
37%
• Nine out of 10 institutional investors
view data and analytics as a high
strategic priority
• For 37 percent, data and analytics as
the most important strategic priority
54%
Most important strategic priority
High strategic priority
Mid-level strategic priority
Not a strategic priority
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
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7. DATA & ANALYTICS
Yet the Industry is Polarized by its Approach
Data is a competitive asset …
But few know how to use it
• 66 percent believe data will be a key source
of competitive advantage in the future
• Only 29 percent of firms are reaping the full
benefits from their data and analytics
capabilities today
• 86 percent increased investment in data
infrastructure in the past three years
An Industry
Divided by Data
• Our research reveals that a capability gap
is opening up between data leaders and
data laggards
1. “Data Leaders” – Companies in the survey whose data and analytics are
already a source of competitive advantage
2. “Data Laggards” – Have yet to gain full benefit from their data
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
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8. DATA & ANALYTICS
Data Leaders are Better Prepared for the Challenges Ahead
Leaders
Data leaders are more confident in ...
Laggards
% confident in capability

70%
• Generating forward-looking insights
from data
42%
72%
• Integrating risk and performance analytics
50%
• Optimizing their electronic trading strategies
By contrast, data laggards are …
• More likely to get distracted by the
complexity of data management
X
64%
53%
% agree with statement
7%
30%
• Less likely to feel their data capabilities are
keeping pace with the growth of their
business
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
92%
50%
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9. DATA & ANALYTICS
Data Leaders have Smarter Tools for Managing Risk, Compliance
and Performance
% that view area as a strength
Leader
81%
Tools for regulatory compliance
Laggard
63%
Leader
60%
Multi-asset class risk tools
Laggard
38%
Leader
70%
Custom benchmarks/indices
Laggard
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
59%
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10. DATA & ANALYTICS
The Industry Wants Tightly Integrated Solutions…
Main Problems With External Data
Lack of integration
Lack of integration capabilities
capabilities
42%
• Data providers need to deliver an
integrated view on risk and
performance
Lack of responsiveness
Lack of responsiveness
from client support staff
from client support staff
35%
Pricing too high
Pricing too high
• Institutional investors often need to
integrate hundreds of external data
sources
35%
Lack of timeliness in
Lack of timeliness in
the provision of data
the provision of data
Pricing too rigid
Pricing too rigid
Source: State Street 2013 Data and Analytics Survey conducted by the Economist Intelligence Unit
32%
30%
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11. DATA & ANALYTICS
Defining a New Service Model
Data You Can Trust
Adaptable Systems
Smarter Insights
Challenge
• Accuracy of information is
the top data challenge
cited in the survey
• Systems must adapt to
support multiple
geographies, asset
classes and regulatory
regimes
• Only 14 percent of
firms have all of the
talent they need to
manage data
effectively
Solution
• Trusted data providers
• Systems that support
global reporting
• New outsourcing
models focused on
insight as well as
cost
• Integrate data to achieve
“one version of the truth”
• Integrated view on risk
and performance
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12. DATA & ANALYTICS
In Summary: How to Become a Data Leader
Get Smart on Risk
• The industry needs tightly-integrated solutions to manage today’s multiasset portfolios
Trade Better, Faster
• Better, more accurate and timely data is key to making better
investment decisions and being able to act on these insights in real
time
Manage Regulation
• Build systems and processes with the flexibility to meet evolving
regulatory demands across multiple jurisdictions
The Bottom Line
• Firms that develop the right data tools and strategies will be rewarded
with better insights, improved performance measurement and a deeper
capacity to understand risk across their global activities
• These advantages will be the edge that defines our future industry
leaders
CORP-0891
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