Snowflake is a combination of infrastructure, platform and data as a service that is cloud provider agnostic and multi-cloud capable and although the Asset Management industry has been slower than other sectors to embrace Snowflake, there is evidence building of a rising tide of interest amongst our community.
Firms have been attracted by the efficiencies of accessing large amounts of data directly in the cloud, enabling them to reduce data storage costs and only paying for data used. This on-demand, scalable compute with pay as you go access to “data at rest” in the Snowflake cloud is winning customers and it is clear that this is more than a passing fad: 28% of firms are now either using or currently implementing Snowflake with a further 22% planning to use it in the next 12 months.
A key driver in this growth of interest has been the adoption by third parties such as market data providers e.g. Factset, MSCI and Rimes, and service providers who are partnering with Snowflake e.g. BlackRock, BNYM, State Street and Citi.
Initial implementations have been focused on functional areas such as: investment Research, Finance, Sales and Distribution. However, it is anticipated that this will expand right across the operational model and potentially even be used as a method of sharing data with clients.
The speed of change in the utilisation of cloud-based technologies has been substantial: our survey showed that 95% of participants have now implemented cloud technology, with 89% favouring Azure given the Microsoft adoption across most firms (at the start of 2020, 42% of firms were yet to adopt a public cloud). This illustrates a growing confidence in the reliability and security offered by such platforms.
In order to maximise full benefit from the opportunities offered, the next step needs to be a philosophical mindset change in how data can be accessed, leading to the decommissioning of internal data warehouses and a significant movement onto cloud-based technologies.
The relationship between business users and the technology function is also evolving, as the use of Snowflake with data lineage and virtualisation tools, such as Denodo, provides a secure governed environment with direct access to multiple golden data sources that empowers business users to self-serve and write their own software.
Snowflake is a technology service that can deliver a scalable, accessible, and useable data solution for the Asset Management industry, in the cloud. The benefits to investment professionals as citizen developers and the operational cost savings that can be achieved cannot be ignored.