Investment bank Goldman Sachs has invested in a financial analytics startup as part of a $15m funding round and plans to implement the firm's analytics platform.
According to the Financial Times, the bank is the biggest single investor in analytics-platform maker Kensho and will use the company’s software, which replaces the labour-intensive analytics tasks through automation.
Kensho’s software enables users to ask complex financial questions through a Google-like interface.
The report said Goldman Sachs plans to cut costs by automating processes and using unstructured data to make business decisions.
Kensho CEO Daniel Nadler told the Financial Times that by not being able to tap unstructured data, banks have traditionally only used 20% of the data that can affect the market. The software will help fill the void in the data scientist skills pool.
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Sumeet Chabria, CIO at HSBC Global Banking and Markets told Computer Weekly the sector is increasingly looking to work with third-party suppliers, including startups.
“The industry needs to look beyond in-house teams and established technology suppliers for innovation and has identified the startup sector as a source," he said. "We need to access talent wherever it is present and use it for innovation.”
Data is becoming increasingly critical to banking operations. Deutsche Bank recently appointed its first chief data officer, with former BT tech executive JP Rangaswami taking on the role to standardise information management to support the bank’s digital strategy.
Good-quality data is not just important to the business's competitiveness, but also to meet regulatory and other obligations. If banks cannot prove they have met the rules, they could be heavily fined by regulators, such as the Financial Conduct Authority (FCA) in the UK or the Securities and Exchange Commission (SEC) in the US.
In a recent interview with Computer Weekly, London & Capital CIO Glenn Murphy said with big data and analytics offering incredible value to organisations, “those that understand the data, its value and how it can be used across all business functions will become the true chiefs of the future."