Mosaic Smart Data: The pace of technological change in the financial markets has never been faster, fueling a voracious appetite for innovation across the buy- and sell-side. Knowing when to engage the help of specialist partners is a critical step towards gaining a competitive edge.
Some financial institutions have recently recast themselves as fintech firms, rather than banks or asset managers. This would have been unthinkable even just five years ago, but it reflects the fact that many of the world’s best technologists and data scientists are now working in finance, developing the tools to help companies unlock the vast potential in areas such as data analysis and automation.
The size of the opportunity explains the driver behind the seismic shift taking place across the industry. It’s been estimated that slow and inefficient software deployment processes cost the financial services sector a staggering $1.5 billion annually. Firms could recoup those costs by adopting innovative technology solutions, but the age-old question remains: to build or to buy?
With so much opportunity, technology teams can’t possibly work across every possible project and explore the full potential in all emerging fields such as data science, AI and blockchain simultaneously. Even the largest firm would struggle to find the internal resources to ensure each avenue is explored thoroughly.
Matthew Hodgson, CEO and founder of Mosaic Smart Data commented,
“There are more advantages to faster development than simply saving on engineering cost. Getting a product to market faster often leads to increased market share and gives a firm a distinct advantage over its competitors. In industries where innovation and competition is high, time to market may be critical factors for a project’s success.”
Research from Greenwich Associates has found that the current method for developing and deploying software within large financial services institutions has changed little over the last 20 years, struggling to keep pace with the explosion in new technologies available to them.
Kevin McPartland, Head of Greenwich Associates Market Structure and Technology Research, warns of the dangers of slipping behind in the innovation race:
“Of course, burdensome regulations and compliance requirements play a part in Wall Street’s slow move toward more modern software deployment, but the lack of improvement and adoption of the latest technology is no longer acceptable,” he says.
However, choosing which projects to focus internal technology teams on, and where to bring in specialist third parties to develop technology, is a key decision for any firm – and one which has the potential to make or break its competitive edge. Before powering ahead with a new technology project, a company should ask itself a series of important questions about its objectives.