So the other thing we're finding with the results from the survey and from our client feedback is the clients are being pressed from a regulatory perspective to provide better transparency to things like data lineage and the use of the data downstream. That is also, you know, being driven by their own needs for data governance and to be able to understand the consumption patterns from a data perspective as it relates to their use in the investment process as well as the servicing of their clients.

In addition to the regulatory pressure, we're also seeing increasing need for the same type of data ingestion and transparency on unstructured data sets. So AI is also playing a role in terms of ingestion and bringing structure to data that's typically unstructured. So scanning PDFs, pulling out the appropriate information and presenting it in the right way for downstream consumption.

Liz Pfeuti: Hello and welcome. Today we're sitting down with Cuan Coulter who is Head of International at State Street, to unpack some of the findings from State Street's latest Data Opportunity survey and discuss what they mean for clients. The survey has spoken to 900 asset managers, owners and other allocators of global capital from around the world.

So Cuan, you've had a long time to read over the results of the survey, and there’s a lot to unpack in there. But one thing that the survey did show us was that clients are increasingly or we are entering an era of a holistic data strategy.

Now, please can you put that into plain English and explain what it means and what it means for the asset owners, asset managers and the people and clients who are implementing this strategy?

Cuan Coulter: Thanks, Liz. I suppose, in short,a holistic data strategy is organizations treating data as a strategic asset. For investors, it's about essentially driving efficiencies and about having better insights. So on the efficiency side, if you streamline front, middle and back, have less data redundancy, have more seamless access to data in a speedy way, you're able to save costs and you're able to be more efficient. From an investment point of view the deeper your access is to the data, the more insights you can generate, and the better your investment decision making is likely to be.

Liz Pfeuti: And there was a key stat in the survey which is available on statestreet.com to have a proper dig into. But one of the key stats is that only 26% of institutional investors and allocators globally have a holistic data strategy fully in place, but over half of them, 55%, are in various stages of implementation.

What do you think, makes having one of these strategies a strategic imperative for organizations, I suppose of all sizes and all types?

Cuan Coulter: Lots of organizations are searching for efficiencies. Notwithstanding that, I think in the asset owner community. Asset owners have fairly complex data needs. Many of them are trying to commingle, public asset data with unlisted data, and they're trying to synthesize that in a way that they can see across the whole of their investment book. And so I think there are different use cases, or different purposes that different, investor types using to, instil this data strategy in their organizations.

Liz Pfeuti: And it seems as well this difference geographically too and North America is leading the adoption, and 33% of respondents in North America say they have one of these strategies in place. But you’re Head of International for State Street, so you see the rest of the world. So what is the rest of the world doing, and how is it that they're far behind or are they catching up. What’s the situation, elsewhere?

Cuan Coulter: So I think it's true that you have a more mature market in North America, potentially a more competitive market in North America, and frankly, a market that has closer proximity to some of the very big data scalers.

I think it's just a simply a matter of time. So I think internationally, the level of interest is just as high. And I wouldn't be surprised at all if you saw sort of a significant ramp up across the globe, in organizations pursuing holistic data strategies.

Liz Pfeuti: So do you have any advice for clients or anybody else thinking of pursuing a holistic data strategy. Because it doesn't sound like it's something you can just do overnight?

Cuan Coulter: I think that's true. It's a pretty complex journey. But the rewards, whether that be enhanced efficiency or great investment insights, I think are really, really well worth it, notwithstanding the fact that it may also pre-position you well for the coming kind of AI revolution.

Liz Pfeuti: So let's move on to other parts of the survey because it's very in-depth. And you spoke to hundreds of asset owners and asset managers and all sorts of different investors.

Now, it's interesting to note that only 24% of asset owners, compared to 35% of asset managers, are using back office data to generate competitive intelligence and inform strategic trends. So why do you think that's the case and do you see that changing?

Cuan Coulter: So I think you have differentials between asset managers and asset owners partly because of the relative maturity and competitiveness of the sort of playing fields that they operate within.

Cuan Coulter: But I think that's a sort of a temporal dislocation. I think over time you will find that asset owners catch up, if you will, to asset managers.

It's true to say that asset owners have very sophisticated data needs. They are often multi asset-class investors. They're often both direct investors and allocators. And so they need the ability to synthesize and aggregate listed and unlisted security data across their whole portfolio.

And sometimes that data is generated by them. Sometimes that data was generated by third parties. So they have fairly deep synthesization needs. In the asset management space, they have several of the same needs that the asset owners have, because they have growing need to cover more asset classes and therefore more complexity in managing the data and synthesizing and aggregating that data. But they also have a greater drive towards getting closer to the underlying investor.

So understanding their investor behaviour better, so to speak. And I'd say that's perhaps, maybe the big distinction between asset owners and asset managers in the pursuit of the strategy.

Liz Pfeuti: So, I want to talk a little bit about the role of custodian, because custodians have always known they’re pivotal to the client experience, the client operations and frameworks. But 94% of respondents to the State Street survey have expressed satisfaction and 34% so over a third, have said they're very satisfied.

But could you share your perspective on what's driving this positive sentiment? Why are people so satisfied? What's going on?

Cuan Coulter: So I think it comes down to utility and accessibility. As you say, we've always had the data, but of late, we've been able to bring that data back to investment decision makers in near real time. So we have at State Street, the Alpha front-to-back model, if you will, whereby we can synthesize data between front, middle and back in near real time and redisplay it back to the front office.

And so I think the utility value of that custody data is now beginning to be realized by asset managers and the asset owners, that have that same front to back, operability.

Liz Pfeuti: So I want to dig in a little bit more to the geographical split of the survey, which is displayed really well, actually. And it shows that nearly 55% of North American respondents are claiming they are very good at integrating and consolidating back office data, which is great. But you’re head of international. So tell us what's happening in EMEA, APAC and LatAM and why that might be different?

Cuan Coulter: So I think it's a question of catch up. You know, North America has the deepest legacy investment in their existing data infrastructures. And perhaps therefore, the greatest need to re-engineer those data infrastructures.

And maybe on the other end of the spectrum in Asia Pacific, as an example, where there is less legacy investment in data infrastructures there, if you will, the problem is less realized.

But they're actually very facile at, modern digital technologies, and I think you would see a significant ramp up in utilization in places like Asia Pacific.

And then in the European theatre you sort of in between, so you have asset management industry, which is, you know, maturing at rates similar to North America. Legacy investment infrastructure that is, not perhaps as deep as in North America, but has created the same sort of need for re-engineering that you have in North America.

Liz Pfeuti: And how is State Street working in all these different areas to support clients to get on this journey to kind of get with the modernization program that everyone needs to be on and deal with everything that's going on out there, which is not under their control. So, what do you do?

Cuan Coulter: So part of that is about allowing clients to see the utility value of having better access to data, better synthesis of the data. Showing them the use cases, showing them just how much more efficient their processes could be, just how much more, insightful some of their investment decision making could be if they had access to the data.

And so being able to present the data to clients and present the use cases associated with that data to the clients is what we do best, to help them understand the value of the journey.

Liz Pfeuti: Cuan, thank you very much for sharing that with us and look forward to next year’s survey.