The future of data silos was just one of the many subjects that Subbiah Subramanian, senior vice president, global head of DataGX, State Street, discussed in this Q&A related to State Street’s Best Data Management Solution win via the FTF News Technology Innovation Awards.
(Editor’s note: Subbiah Subramanian, senior vice president, global head of DataGX, State Street, took time out of his very busy schedule to answer questions related to State Street’s Best Data Management Solution win via the FTF News Technology Innovation Awards, which were presented to winners at a gala event this past June in New York City. Subramanian, who joined State Street Global Exchange in 2015, has two decades of experience in the investment management industry. For his current role, Subramanian is responsible for the delivery of data management services to clients around the globe. Before State Street, he was head of BNY Mellon’s front office services and instrument engineering team where he had responsibilities for the entire service offering such as operations, technology and the direction of the group. He has also worked at Putnam Inc., where he served as vice president, investment systems at Putnam Investments in Boston.)
Subbiah Subramanian, senior vice president, global head of DataGX, State Street
Q: What data management advances in 2016 did State Street Global Exchange apply to its offerings that helped it stay ahead of the competition?
A: Fundamentally what changed, starting in 2015 and more materially in 2016 and 2017, is State Street saying: ‘Data is now the center of our business.’
Clients come to us to solve their data management needs, whether it’s the integration of other third-party data or solving some of their customized front-office needs.
We needed to develop a data management platform that allowed the client to directly interact with data, making life easier for our clients. Once you have a data platform, it opens up the possibilities to help our clients in bigger ways.
Regardless of what kind of business relationship you might have with State Street — whether that’s middle office, back office, custody — the data is going to be delivered and accessed by you through our data management platform. This clearly takes it to the next level of interaction with our clients.
The key is that this platform is completely maintained and managed by State Street even though it has client data sitting in the middle of our two organizations. The client does not have the overhead of operating it. We provide the business continuity and all the technology behind it. As it’s all managed by State Street, it’s truly data as a service.
Q: Just as a follow-up, could you describe who these clients are? Are they a certain kind of firm? Can you share any demographic about them?
A: What we found interesting — and this is resonating across our client base — is that whether they are asset managers, asset owners like pension clients, insurance companies or even hedge funds they are all dealing with investment data, and have a need for data and a data problem they’re trying to solve.
The other aspect is global. State Street is a global business and we’re seeing it resonating with clients globally.
The third angle to this is how big they are. We have clients who have $10 billion to $15 billion dollars in assets under management (AUM), going all the way to a trillion dollars. And, again, it’s resonating across clients with a variety of AUMs.
In sum, it’s resonating with our clients in several dimensions.
Q: Did State Street Global Exchange experience any data management trends last year that were surprises for the firm?
A: You know, if you talk about the surprises, there are a couple of them.
One is how fast the clients are embracing this. Because of the cost pressures that our clients have, they’re trying to offload any non-Alpha-generating activity to someone like State Street that they already trust. That’s one aspect.
The other is how the market is embracing the cloud. It’s great because with the cloud you get infinite scale, and we get infinite performance at a very, very competitive cost.
Q: Do you think 2016 was a turning point for cloud computing and securities operations?
A: Almost every client we talk to has pieces of their data now sitting in the cloud, and they’re much more comfortable with that aspect of data sitting outside of the data center.
Yes, I would definitely see this a big turning point and start of a trend I think.
Q: In your opinion, how have clients’ data management needs changed over the last five years?
A: I wouldn’t say the needs have changed but rather how they’ve solved it has changed, which means that data vendors are able to provide data in a streamlined fashion.
The data management space has evolved so that this could be done in a common place by one firm like State Street. It’s enabling them to focus their energy on their business priorities.
Clients have figured out that data management is much more common than they thought it was. Previously, groups would say, ‘I’m special and I’m the only one doing this.’ But, now, they are realizing that that is not the case and there’s a lot of overlap between every other firm.
Q: Have changing data management expectations meant the end of data silos for your clients?
A: We are in the beginning of this trend. I mean, very similar to how backups were outsourced 20 years ago, and then middle office outsourcing was a big trend 15 years ago.
That’s the reason why when we started DataGX. We said we’re not selling software; we’re delivering this as a service because that’s what the clients have asked us for.
We believe this will end data silos because the whole concept is that you don’t have to take data from State Street and then replicate it within your own environment. This is your platform. So, you can bring your calculations to the data.
Q: Are firms actually moving away from data silos?
A: You know, these silos have been built over years and the end goal is, ‘I have eight different platforms within my organization that I manage data in some form. How do we consolidate that into one?’
That is what the client is getting at: ending the silos.
Q: What is ahead for the rest of 2017 and beyond, for clients and their data management needs?
A: Here is our expectation, and this jives with what we’ve been hearing from our clients: every piece of the data management projects of our clients is going to involve buying data as a service.
They’re going to say: ‘Look, I want to be doing everything, from recording data, validating it and aggregating it. So, what can you do on our behalf?’ That’s certainly the trend we’re seeing.
The thing is customers say, ‘Look, I need to set up benchmarks. I need to set up risk statistics … and gather all this stuff. But can you guys just get it, make sure it’s clean and then serve it up to us?’ That’s the whole idea of data as a service.
Our look beyond 2017, and frankly for the next five to 10 years, which is the long haul, is that we expect to be more and more the solution rather than clients putting up their own platforms and hiring people to do that.
Q: Does that change the role of State Street as well? I mean is State Street now obviously offering financial services support and advice but also IT support.
Q: Absolutely.
This is an all-in-one service, right? So, we are getting one level closer to our clients where if they want to bring in a new source of data … basically State Street would get a call saying ‘Hey, to get at X could you worry about integrating new data? … And then we would work with the vendor, working with the data source, making sure that it’s getting integrated into the platform.
This is transformative for State Street truly in a lot of ways.
Need a Reprint?