As per the Financial Services Global Market Report 2021, the global financial services industry (FSI) is expected to reach a valuation of $28,529 billion in 2025 from $22,515 billion in 2021, a growth of 26% during the forecast period! Data and data-driven decisions are at the core of FSI! These help FSI gain insights and help in identifying transaction patterns, profiling customers, and even predicting future buying behaviors.
FSI organizations like banking and fund management companies collect, aggregate, and analyze petabytes of data from various internal data sources like portfolio, actuarial, order management, and risk management systems as well as data from external sources like real-time market feeds and historical securities prices from stock exchanges. And believe me, it takes a long time to collect & aggregate data, get permission to access them in a compliant way, and prepare them for analysis!!
Because of the time and effort required to collect and prepare data for analysis, FSI organizations generate and acquire large amounts of data. However, interpreting this data is extremely challenging. What can be done to cut down on this time? Using a suitable solution? Yes! And AWS FinSpace is the answer!
Amazon FinSpace is a data management and analytics platform tailored to the financial services industry. It cuts the time it takes for FSI companies to find, prepare, and analyze financial data in half, from months to minutes. In this blog, we’ll go over AWS FinSpace and how it works, as well as its benefits, features, and cost.
In part 2 of this blog, we will demonstrate how to create and use an Amazon FinSpace Environment for financial data analytics.
In this blog, we will cover:
- What is the Financial Service Industry?
- What is Amazon FinSpace?
- How does it work?
- Why should I use Amazon FinSpace?
- Benefits of Amazon FinSpace
- Features of Amazon FinSpace
- Pricing
- Other Cloud based Analytics solutions for FSI
- Customers using Amazon FinSpace
- Conclusion
What is the Financial Service Industry?
Before we dive deep into Amazon FinSpace let us first get a general idea of what is FSI.
If you are an investor, a homeowner, a small shop owner, an online business owner, a professional lawyer, a doctor, or just a savings account holder, you have worked with the financial service industry for sure! But what is the financial services industry exactly? But what precisely is the financial services industry?
- Financial services are one of the most important and influential industries in the economy.
- Financial services encompass a wide range of operations such as banking, investing, and insurance.
- Financial services refer to the activities of financial services firms and their employees, whereas financial products refer to the items, accounts, or investments that they offer.
Companies involved in investing, lending, insuring, securities trading and issuance, asset management, advising, accounting, and foreign exchange are included in the FSI. The following are some of the major FSI sectors:
- Retail and Commercial Banking
- Investment Banking
- Venture Capital and Private Equity
- Accounting
- Insurance
There’s plenty of big data in all the above sectors of FSI, especially banking and insurance services. Except for dispensing cash from ATMs, there’s nothing tangible—every customer interaction simply generates electronic records that must be retained due to regulatory requirements. Financial services businesses are no longer just holding data when it’s needed; they’re actively leveraging it to develop business insights and add value, thanks to big data analytics. Here are some of the most prevalent use cases for big data analytics in banks and financial services organizations.
Better analysis leads to better judgments, which in turn leads to higher profits for financial organizations. In the financial services industry, analytics aid in the efficient management of IT systems and SLAs. These systems give stakeholders access to all of the workforce’s performance indicators.
This information helps decision-makers in evaluating the vendors’ effectiveness and avoid any unnecessary costs. Branch & Network Optimization is important for cost savings as well as better customer experience.
As shown in the following image:
Disruptive innovation in financial services is being ushered in by rapidly evolving technologies, changing client expectations, and a shifting regulatory landscape. Customers, investors, and incumbents have all been captivated by the shift from wallet payment to cardless payment.
All of these advanced FSI trends necessitate the use of analytics services, which can cut the time it takes FSI firms to find, compile, and analyze data from months to minutes. AWS FinSpace is the solution! Let’s have a look!
What is Amazon FinSpace?
FinSpace is an Amazon data management and analytics service designed specifically for the FSI. FinSpace cuts the time it takes to find and prepare petabytes of financial data for analysis down to minutes rather than months.
FinSpace takes care of the grunt work of setting up and maintaining a financial analytics data management system. FinSpace allows you to collect data and organize it using important business concepts like asset class, risk classification, and geographic location. FinSpace makes it simple to find and exchange data across your company in accordance with your compliance needs. FinSpace enforces your data access controls while keeping audit logs for compliance and activity reporting. FinSpace also includes a library of functions, like time bars and Bollinger bands.
“Amazon FinSpace is a game-changer for financial services companies. Amazon FinSpace cuts the time it takes for FSI companies to run analytics across petabytes of data in half, making it much easier for them to find new revenue streams, recruit customers, and save costs and risk.”
How does it work?
- FinSpace may be launched from your AWS dashboard, and you can choose how data is structured in the catalog for easier searching.
- Add data that will be needed for analytics.
- Organize and characterize the information so that it can be found in a catalog.
- Prepare data by creating historical or current data views partitioned to optimize performance.
- Analyze data with built-in Jupyter notebooks and manage Spark clusters for large-scale data processing.
As shown in the above image, the FinSpace time series framework defines a set of stages to transform data from raw time series data events to the computation of finance-specific analytics such as technical indicators.
FinSpace’s time series capabilities are used at many stages. Each stage receives input from the previous stage and passes it on to the next.
Why should I use Amazon FinSpace?
- Amazon FinSpace takes care of the undifferentiated heavy lifting involved in storing, preparing, managing, and auditing data access.
- It automates the steps involved in finding data and preparing it for analysis.
- Amazon FinSpace uses industry and internal data classification norms to store and organize data.
- Analysts connect to the Amazon FinSpace web interface to search for data using familiar business terms.
- Analysts can prepare their chosen datasets using a built-in library of more than 100 specialized functions for time series data. Amazon FinSpace provides a framework to manage data access and audit who is accessing what data and when. It tracks the usage of data and generates compliance and audit reports.
- Amazon FinSpace makes it easy to go back in time and compare how models are evolving alongside multiple dimensions.
Concept of Amazon FinSpace
- Find: Browse the categories on the left side to find data for analysis, or search for data using keywords. Search for US Equities Trades and Quotes, or Reference Data, for example.
- Add: To share your data with your team and analyze it in a JupyterLab notebook, upload it to FinSpace.
- Analyze: Analyze data with Spark clusters using a JupyterLab notebook with an integrated library of financial analytics.
Benefits of Amazon FinSpace
- Find data with just a few clicks: Amazon FinSpace makes it simple to organize, classify, and manage your data using terms like asset class and instrument type that are often used in the financial services industry. You can search the FinSpace catalog using familiar phrasing like “options trades for the S&P 500” or “loan delinquency rates” to easily find the data you are looking for.
- Get insights in minutes: Amazon FinSpace saves you time by delivering over 100 pre-built data preparation processes, including machine learning algorithms, that are routinely used in the financial services industry. FinSpace allows you to keep track of past versions of your data and how they evolve over time. You can also utilize FinSpace to load your existing libraries of proprietary and open-source functions so you can continue to use them for data preparation and analysis.
- Ensure regulatory compliance: By enforcing data access rules and tracking data used to provide compliance and activity reports, Amazon FinSpace helps you satisfy your regulatory compliance needs. FinSpace allows you to set data access controls that are automatically enforced.
- Eliminate operational overhead: Focus on financial data analysis without having to worry about the operational overhead of building and maintaining the infrastructure needed for financial data management and analytics.
Features of Amazon FinSpace
- Eliminate operational overhead:
Fully managed service: FinSpace eliminates the need to integrate a financial data management system with analysis tools and build all the components required to do so, such as bi-temporal storage, a data catalog, Spark clusters, and more. To get started, your team only needs to connect FinSpace to your data sources.
Managed Spark computes: FinSpace allows you to easily process data at scale, perform data transformations, and run analytics by launching managed Spark clusters from a Jupyter notebook. To fit the size and complexity of the task you need to conduct, you can choose from one of the pre-configured cluster templates.
- Get insights in minutes:
FinSpace’s APIs let you ingest data from internal and third-party data streams, such as risk management systems or historical stock exchange prices, as well as existing S3 buckets. You may also use the web application to drag and drop files. In FinSpace, your data is encrypted with an AWS KMS key that you establish and maintain.
FinSpace is designed to make data collection and processing in the financial services industry, such as time series and reference data, easier. FinSpace may apply adjustments or modifications to your time-series data as data is collected on a regular basis, so you don’t have to do any additional post-processing to complete the analysis. FinSpace also converts all acquired raw data into compute-optimized formats such as Apache Parquet, making it easier to analyze.
- Find data with just a few clicks:
Financial time series data processing library: FinSpace’s financial time series data processing library allows you to transform and enrich time series data. Financial analytics may be performed in Jupyter Notebooks using the library’s 100+ functions, such as the computation of statistical and technical indicators to support investment and risk management choices. It also has capabilities for filtering and normalizing time series data into time bars, such as a stock’s open, high, low, and closing values.
FinSpace makes it simple to test modeling assumptions with historical data by allowing you to examine and use datasets at any point in time, including when they were acquired.
Integrated Jupyter notebooks: You may access all data directly from Jupyter notebooks built-in to interface with your data when performing data preparation and analysis in FinSpace. FinSpace’s catalog lets you securely share data created in your notebook with other members of your team.
- Ensure regulatory compliance:
Data access controls and audit reports: FinSpace lets you define access policies in one place and enforces them across data search, visualization, and analysis. FinSpace also records access and operations that you and your systems perform on data. You can use FinSpace audit reports to demonstrate compliance with your data governance policies.
Pricing
Amazon FinSpace is a data management and analytics service for financial services industry (FSI) customers such as hedge funds, asset management firms, insurance companies, and investment banks to store, catalog, prepare, and analyze data at a petabytes scale. Customers can set up users, add data, and develop data views that are suited for querying using the FinSpace web application and APIs. To prepare and analyze data, Amazon FinSpace offers scalable clusters.
You are charged per minute based on the cluster sizes
Other Cloud-based Analytics solutions for FSI
Cloud adoption is at an all-time high and other major cloud players have sensed the opportunity in the FSI space and are introducing their new services to capture the market. Following are the other two major players along with AWS FinSpace:
- Microsoft Cloud for financial services
- IBM InfoSphere Master Data Management
Customers using Amazon FinSpace
“In working with financial services industry clients, we have found that cloud-based analytics and AI/ML allow us to answer questions that we couldn’t answer several years ago and drive value in new ways. Data, analytics, and AI/ML will continue to be key and become even more important to financial institutions’ decision-making and business outcomes over the next decade,” – Jojy Mathew, Principal, Deloitte Consulting LLP, and Deloitte’s Financial Services Data and Analytics Leader globally.
Conclusion
In this blog, we have discussed the FSI industry and cloud-based data analytics solutions for the FSI industry. We have discussed that FinSpace enables ‘analytics sandboxes’ to be created quickly and brings advanced analytics capabilities to data scientists. We have discussed its benefits, features, how it works, customers & pricing.
We will demonstrate how to create an Amazon FinSpace environment for FSI data analytics in our upcoming blogs. Stay tuned to keep getting all updates about our upcoming new blogs on AWS and relevant technologies.
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