Deutsche Bank report: Using data to take an open approach to investment banking

Tue Oct 10, 2017
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Investment banking is one of the world’s oldest and most data-rich industries. It provides a large range of financial products and services to businesses, governments and investors, helping them to grow and manage risk.

The sector is undergoing significant change, adopting new technologies and regulations, transforming organisational cultures and reducing costs.

Executive summary

Investment banks use and make vast amounts of data daily to make decisions and execute transactions. Historically, a lower level of interest in data infrastructure from client-facing teams and friction in data processing limited returns on data assets. But as clients want more data, and as technology advances and costs less, there are signs of a more open approach.

At the same time, regulators are mandating banks to share more, and the growth of open data in other sectors has demonstrated its positive impact on innovation and value creation. The sector’s first true application of open data infrastructure may not be far off.

The Open Data Institute wants to support this sector shift by facilitating a discussion on data infrastructure and working with stakeholders to identify, test and implement solutions that make data more accessible and open to stakeholders.

In this spirit, our report considers:

  • the sector’s existing data infrastructure, in terms of data assets (or datasets), processes, technologies and organisations
  • where data assets are currently mapped on the data spectrum, from closed to open
  • challenges and opportunities in using open data to create a strong data economy
  • open data case studies from other industries

Our initial analysis highlights significant data challenges and ways open data may help. Much public data historically managed in a closed or proprietary way could be used more productively via a shared or open approach, using APIs and other newer technologies, offering interoperability the industry currently lacks. More radically, private data made more open in the appropriate ways could create value for banks, their clients and the economy.

Based on its delivery experience and research the Open Data Institute believes that a data infrastructure which is as open as possible will create most value for the sector.To begin strengthening the investment banking sector’s data infrastructure, we recommend a series of next steps:

To begin strengthening the investment banking sector’s data infrastructure, we recommend a series of next steps:

  • Interested sector participants should task an independent facilitator, whether it is the ODI or another group, to harness the collective expertise and insights of investment banks by gathering their feedback on where the greatest data challenges lie.
  • In partnership with sector participants, these learnings can be used by the ODI and/or other open data experts to assess where open data may be of use.
  • One area where there may be a clear and immediate need is regulation: particularly Know Your Customer (KYC) and Markets in Financial Instruments Directive (MiFiD)
  • Another area where there is a clear rationale for open data thinking but perhaps less impetus for change is the overall life cycle of a trade (where there is often unnecessarily closed data and/or public data not accessible in an open way).
  • When specific challenges have been defined, working groups can be formed to begin identifying, testing and implementing open data solutions.