Digiterre’s Rajesh Jethwa is named in the top 30 of the 2023 CIO 100
Data is rapidly becoming essential to competitive advantage in energy and commodities trading – but the cost and complexity of data management is driving trading companies to think more strategically about their approach.
At this year’s Energy Trading Week and Commodity Trading Week, Digiterre moderated a number of panels which explored some fascinating routes to best practice in data management. Discussions highlighted the importance of technology advancements to help businesses manage data and analytics, accelerate cost reductions and enhance organisational decision making.
It was clear throughout the conferences that trading businesses have access to an abundance of data. But access to data is not enough. True success rests on how accurately and quickly businesses can extract value from their data. Many trading businesses reported struggling with data discovery, assessment, ingestion, mapping, standardisation, and analysis. Whether using legacy or new systems, traders often suffer from poor data quality, in terms of value, fidelity and timeliness.
Data and technology were cited by trading businesses as key barriers to success in their organisations. For example, many reported that data and technology shortcomings are the main impediment to embarking on algo trading. In the algo trading arena, advanced IT infrastructure is essential to support fast execution and low latency. This infrastructure needs to be well-structured with robust governance, regulatory and compliance considerations built in, especially with regard to risk strategy. Ideally, systems would be developed internally, by leveraging in-house resources and blending them with external expertise where required, in a collaborative, iterative cycle – develop models within the team, train the team to develop models. This fosters true in-house capability and culture, over the long term, which is required for digital transformation and therefore algo implementation.
The conference also highlighted the importance of advanced technology that is highly flexible and adaptable to change, provides a standardised view across processes, workflows and analytics, and can easily be integrated across the systems ecosystem, for example the integration of ETRMs, ERPs and accounting tools.
While data is recognised as crucial to gaining an edge in the marketplace, it’s sheer volume, and in some cases cost, can seem overwhelming to all but the very largest corporations. This was especially true when buying or sourcing traditional third-party data, and increasingly alternative data, such as from sensors, geospatial satellites, and even social media, to get ahead in the marketplace.
Most trading companies recognise that they would not be able to achieve competitiveness without investment in high quality data management, including data streams, analytics and insights. Having partnering with leading trading firms, across all sectors and strategies, we have observed that market participants who actively address and invest in data, in the build, design and management of trading platforms, respond better to market conditions than their peers. However, getting data management right requires careful planning and execution across the intersection of markets, technology and culture.
We at Digiterre are running a Webinar on Thursday 29th October from 2:30 pm to 3:30 pm and we welcome you to join us as we discuss in greater detail, insights in technology and how your data strategy can increase the quality of data, reduce cost and improve insight and decision making. It would be great to speak to you further on these issues and potential solutions at this event.
Register here to attend this event.
By: Rajesh Jethwa
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