Competing With Data & Analytics
On the heels of a global financial crisis, what used to work in the world of custody banking no longer does. Once-trusted partners are now cash-strapped and credit-unworthy, and new federal regulations are pervasive — factors that have created a need for more reporting, more analytics and more insight into the entire trading lifecycle.
In this new world, State Street Corporation — the hallowed banking giant that services 12% of global assets — faced a fundamental question: What lies ahead, as not only its business model, but also its clients’ businesses, are shifting? How could it reimagine itself in a relevant way for clients, continue to build capabilities, and constantly innovate?
The response: State Street Global Exchange (SSGX), a new business launched in April 2013, which enables the organization to partner with its clients to apply a wrapper of information, insights and analytics around the investment process.
But launching a new analytics-focused business in a 222-year-old company with 30,000 employees is no small feat; it requires a massive cultural shift. “You have to continue to adapt to thrive. This is one of those places where we’re adapting,” says J.R. Lowry, senior vice president and chief operating officer of SSGX.
Lowry spoke with MIT Sloan Management Review contributing editor Renee Boucher Ferguson about the launch of SSGX, and how his group is implementing a new culture.
Before we dig into the specifics of the State Street Global Exchange, let’s just get a level-set of where State Street was at with analytics prior to launching SSGX.
In general, data and analytics have pervaded our business for many, many years, but it wasn’t something that we were focused on in any kind of coherent way. So, when we ultimately decided to stand up State Street Global Exchange, we knew we had to pull pieces of our existing capabilities from across the company and also bring on new, differentiated talent to help us reach for the white space.
What became the driving force for creating this business was that our clients are facing, like people in most industries, all of the challenges associated with managing big data and what that’s doing to business models. Financial services are no different in that respect.