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Article

Why the Financial Services Industry Likes Data Virtualization

Better information leads to higher returns

Finding and exploiting an arbitrage opportunity, before the other firms, can dramatically increase trading profits.  Uncovering hidden risks and hedging properly can significantly reduce volatility and free capital.  Enabling managers to better understand  positions and trades can provide the service levels that high net-worth clients demand.

In the financial services industry, the greatest profits typically flow to the institution that gains the greatest financial insight from their data.  In other words, return on data excellence equals return on assets performance.

Discovering, accessing, combing, transforming, and delivering trading and reference data is critical to successful return on data.

Data virtualization holds the key.

Data Virtualization at Work in Financial Services
Data virtualization use by financial services firms is extensive.  Here are but a few of the use cases these institutions have deployed:

  • Risk Management – Data virtualization aggregates a single view of institution-wide risk so you can better manage market, credit and operational risks in real-time.
  • Reference Data Sharing – Data virtualization provides a single virtual source for reference and other data required to complete a financial transaction or a critical analysis.
  • Prime Brokerage Reporting – Data virtualization provides the single view of positions and trades your prime customers’ want, whenever they want it.
  • Financial Analysis and Trading – Data virtualization simplifies and reduces analyst time spent on data access.  Your analysts spend more time performing the analyses your traders and customers can leverage for greater profits.
  • Mergers & Acquisitions – Data virtualization lets you virtually federate data from across these duplicate systems so you can gain cross-selling synergies sooner.
  • Compliance Reporting – Data virtualization simplifies compliance reporting for regulatory initiatives including Dodd-Frank, Basel II and Sarbanes-Oxley.  Because internal systems have been optimized for operations, not compliance, data virtualization reduces the data integration component in your compliance reporting costs.

Data Virtualization Pays Off!
While they are huge consumers of information technology, financial services companies keep their eye on the bottom line. Technology investments must pay off.  And fortunately, data virtualization investments pay off amazingly well.

More agile and lower cost than traditional data integration methods based on consolidation or replication, data virtualization successfully integrates financial instrument and product line data silos and delivers significant business benefits including:

  • Greater Revenues – Accelerate time to market for new information-based offerings
  • Improved Productivity – Ensure analysts and client representatives have all the information they require
  • Lower Costs – Avoid long data integration development cycles and excessive data replication
  • Decreased Risk – Provide institution-wide visibility across positions and activities
  • Better Compliance – Meet compliance data requirements faster, for less

Greater Return on Information Assets
With so many opportunites and signficant benefits, it is easy to see why the financial services industry has led the data virtualization parade.

Do the same opportunties and benefits exist in your industry?   If so, give data virtualization a try.

More Stories By Robert Eve

Robert Eve is the EVP of Marketing at Composite Software, the data virtualization gold standard and co-author of Data Virtualization: Going Beyond Traditional Data Integration to Achieve Business Agility. Bob's experience includes executive level roles at leading enterprise software companies such as Mercury Interactive, PeopleSoft, and Oracle. Bob holds a Masters of Science from the Massachusetts Institute of Technology and a Bachelor of Science from the University of California at Berkeley.