As Managing Director of Architecture and Enterprise Services in DTCC’s IT group, Neelesh Prabhu leads the effort to modernize the technologies powering the post-trade financial services organization’s business lines. In a recent episode of The Data Cloud Podcast, he explains the major role data modernization plays in this transformation, and he shares his thoughts on the future of his industry sector as financial businesses become data businesses.
The Depository Trust & Clearing Corporation (DTCC) and its subsidiaries provide the global financial services industry with premier post-trade market infrastructure to help automate, centralize, standardize, and streamline the processing of financial transactions. “We support our clients by mitigating risk, increasing transparency, and driving efficiencies,” Prabhu says. “In 2021, we processed $2.4 quadrillion of securities transactions, which reflects our scale.”
DTCC’s clients include thousands of brokers and dealers, custodian banks, and asset managers. Owned by the financial services industry, DTCC operates in a highly regulated environment, with oversight by 23 different regulators around the world. “Our culture is focused on stability, security, and resiliency, and we see innovation as one of our strategic pillars,” Prabhu says.
Leading a team of over 1,500 technologists, Prabhu has global responsibility for DTCC’s technology architecture as well as for the delivery of enterprise technology services across the organization. “We have embarked on a multi-year strategy that will modernize not only our technology, but also key aspects of our business, including enhancing client experience, while managing production stability and resiliency,” he says. “Data modernization is a key aspect of that overall modernization strategy, providing timely and seamless access to data, improving the experience for both our internal and external clients.”
DTCC began using Snowflake’s Data Cloud in 2018 to enable a faster time to market for solutions, shifting away from on-premises data infrastructure that required lengthy software installation and configuration processes. Additionally, the organization was able to reduce the cost and complexity of managing and running its on-prem data warehouse software and hardware.
“The cloud model was a relatively easy decision for us,” says Prabhu. “As we migrated, we achieved significant benefits, most significantly in being able to better visualize, analyze, and distribute data. We’ve been able to sharpen our focus on client needs and experience, which has been a game changer for us.” DTCC is using the Snowflake Data Cloud to provide additive services for its clients while also leveraging the platform internally to democratize data and create a culture of innovation.
DTCC and Snowflake announced a significant expansion of their relationship in September to include data sharing and the running of data-bound applications and intraday near real-time analytics. The organization also plans to take advantage of the data science capabilities of the Data Cloud to crunch AI models of DTCC data.
Data sharing is of great interest to DTCC as the financial sector moves away from SFTP (secure file transfer protocol), which requires data downloading, to models where multiple parties can all use common cloud-based environments to securely view and interact with the same data. As well as realizing efficiencies in IT budgets and making the delivery process more resilient, another benefit of the cloud is the ability to onboard clients quickly once they’ve chosen to license a DTCC product. “In an SFTP world, the provision process can take three to four weeks, and we provision access on weekends,” says Prabhu. “You miss a weekend, and you lose weeks of subscription revenue.”
Capturing increasing amounts of industry trading activity in Snowflake makes it easier for DTCC to develop new data products. At the same time, Prabhu notes how using the Data Cloud also helps to reduce the compute time for workloads; for example, from three hours down to six minutes. “The fact that we can get data faster to our clients has immense value,” he says. “A hedge fund manager in London will have our data in time to run their sentiment models when the markets are ready to open in Europe, which puts them at a significant advantage.”
Looking ahead, Prabhu sees an industry that is evolving from a transaction-based business model to one which will serve data insights and analytics back to its customers as an information partner. Just as retail banks have evolved from simply providing payment services to now tracking spending habits, issuing individualized alerts on fraud, and providing recommendations on ways to optimize your financial situation, he expects institutions serving the capital markets will also start to provide greater insights and recommendations.
“Banks in the institutional space are going to extend their universe from transaction processing to other areas like compliance, regulatory reporting, and risk management,” Prabhu says. “This is going to blur the lines between different players.” Collaboration and data sharing will help support this trend as well as the increasing comfort level with using cloud services and storing data in the cloud. “This trend is going to create new ecosystems where data can be shared between market participants,” he adds.
The Data Cloud is a podcast hosted by award-winning author and journalist Steve Hamm. For each episode, Hamm speaks with a data leader to learn how they leverage the cloud to manage, share, and analyze data to drive business growth, fuel innovation, and disrupt their industries. You can listen to more episodes here.