These findings come from a recent survey conducted by Wall Street & Technology in conjunction with Platform Computing, SAS, and the TABB Group. [Disclosure: Platform Computing is a sponsor of BriefingsDirect podcasts.]
Completed in July, the survey found noteworthy differences in the challenges being faced by both buy- and sell-side firms, with sell-side institutions more likely to report a lack of a scalable environment, insufficient capacity to run complex analytics, and contention for computing resources as significant challenges.
According to the survey, data proliferation and the need to better manage it are at the root of many of the challenges being faced by financial institutions of all sizes. Two-thirds (66 percent) of buy-side firms and more than half (56 percent) of sell-side firms are grappling with siloed data sources. The silo problem is being exacerbated by organizational constraints, including policies prohibiting data sharing and access, network bandwidth issues and input/output (I/O) bottlenecks.
Too much data
Ever-increasing data growth is also cause for concern, with firms reporting that they are dealing with too much market data. Sixty-six percent of respondents didn't think their analytics infrastructures would be able to keep pace with demand over time.
Both buy- and sell-side firms plan to increase their focus on liquidity and counterparty risk in the next 12 months. Counterparty risk management was ranked as the highest priority for the sell side (45 percent) with liquidity risk following at 43 percent. Liquidity risk and counterparty risk scored high for the buy side with 36 percent and 33 percent, respectively.
The financial institutions plan to turn to a combination of technologies including cloud computing and grid technologies. Within the next two years, 51 percent of all respondents are considering or likely to invest in cluster technology, 53 percent are considering or likely to buy grid technology, and 57 percent are considering or likely to purchase cloud technology.
The report, “The State of Business Analytics in Financial Services: Examining Current Preparedness for Future Demands,” is available for download at http://www.grid-analytics.wallstreetandtech.com. (Registration required.) Wall Street & Technology, in conjunction with the survey sponsors, will host a webinar to discuss in-depth key findings of the survey on October 7 at 12 pm ET/9 am PT. For more information, visit: http://tinyurl.com/2ulcesm.
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Disclosure: No positions.