Northern Trust has become the latest service provider to sign up to the cloud-based data vendor Snowflake.
The global custodian and Snowflake will collaborate on the development of a data service for Northern Trust’s asset servicing clients.
It will focus on Equity Data Science, an analytics platform that Northern Trust acquired in February as part of an effort to offer more front-office functionality to outsourcing clients.
The benefit of Snowflake is that it allows for data to be shared by multiple parties on the same cloud-based platform, as opposed to the traditional practice of sending, mapping and storing data files across platforms.
“This is game-changing technology that replaces the old way of exchanging data,” said Paul Fahey, head of investment data science at Northern Trust. “Clients will have access to data insights that accelerate speed to market in ways that previously didn’t exist. Our goal is frictionless onboarding of new clients within 24 hours, and Snowflake’s Data Cloud puts that within reach.”
Snowflake has signed a number of key names in the asset management sector. State Street, Broadridge, Citi and others have all adopted Snowflake in recent months as well as market data providers such as Factset, MSCI and Rimes.
Meanwhile in February, BlackRock announced a partnership with SnowFlake to launch Aladdin Data Cloud and in September SnowFlake launched Financial Services Data Cloud.
The Northern Trust announcement comes at the same time as a study of 23 asset managers by financial services consulting firm Sionic found that 50% are either currently implementing it or plan to in the next 12 months.
The benefits of Snowflake are numerous, according to Sionic partner Clare Vincent Silk. These include easier access to data sources for research teams and analysts, at a time when consistent ESG-related data is difficult to attain; reduction in data storage costs; better data governance as a result of accessing data directly from its source; and less reliance on technology teams for acquiring data.
However, arguably the greatest benefit of Snowflake is the ability to scrap existing and costly old technology including data warehouses. That will take some commitment and greater research from asset managers.
It is a major mindset change that needs investigation, said Vincent Silk. “The benefits are clear. The challenge is for asset managers to learn how it should be implemented.”