Technology

Data: The new oil

With our partners at Reframe Capital, LemonEdge Software is looking in-depth at what investment managers need to think about right now. At the top of the list is data. Why is it considered ‘the new oil’?

Jamie Nascimento

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April 1, 2021

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min read

The world isn’t run by weapons anymore, or energy, or money. It’s run by little ones and zeroes; little bits of data.

Whenever I think of how essential data is to the way we do business in 2021, I always think about Sneakers – that great film from the 90s. That line, that Ben Kingsley says to Robert Redford, sums it up perfectly. Quietly, data has become the fuel that drives everything.

As part of our new partnership with Reframe Capital, we’ve put together a series of articles with its founder, Ben Lamping. We’re going to explore the topics which are top of mind (or should be) for investment managers right now.

Over the next four weeks, we’re going to explore data – the new oil!

The building blocks for giants

Financial services is always a little slower to pick up on new tech. To see the future, we need to take a view outside of our category. When you do this, one thing is clear - realising the power of data has enabled leading providers in their sectors to become billion-dollar global giants.

Look at Facebook, Amazon and Apple. You might assume that Facebook is a social media business, Amazon is in logistics and Apple sells technology. While this assumption would be correct under some definitions, it ignores how all three companies have grown to the level they are at now.

Facebook drives its revenue by knowing more about you than you can remember yourself, running this knowledge through complex algorithms and matching it with advertising.

Amazon (putting its web services aside for one moment, which makes up 63% of operating profits) has perfected the ability to match their customers’ demands with suppliers.

Apple may not sell your data, send you vast quantities of advertising or connect you to physical suppliers. However, through the data it collects across all your applications, it can build an eco-system around you that feels natural. So, when Apple’s next piece of ‘tech’ launches, it almost feels like a symbiotic addition to your current lifestyle. Come on; you don’t think that watch you’re wearing right now is because Apple wanted to compete against the Swiss brands?! Apple is also collecting data about your personal habits and health – another area it is advancing in rapidly.

By being clear on their core proposition, then harnessing data they had already collected, in a manner that enabled robust insights and decision-making, these businesses drove exceptional growth. Can we apply the same logic to financial services, notably Private Capital? The answer is yes – and we should.
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Coming up

In this series of articles, we’re going to look at how data works closer to home. We want to enable every investment manager to take their data to the next level.

Here’s what we’ll be covering:

Data visualisation – the new battleground. Taking the raw data and presenting it in a way that allows for fast, accurate and relevant decision-making; the recent focus on measurable impact reporting and the continued focus on ensuring the right metrics.
Excel – importing and exporting data. You can’t knock it. Excel is here to stay. But, you have to watch out for fat fingers and ensure data integrity as you move data between providers. It’s a constant risk.
Connectivity and data providers – enhancing or drowning? It feels like every day there’s a new source of data, as more vendors see an opportunity to join the market. As a client, how you avoid being overwhelmed by sheer volume, connect these disparate sources, build a broader picture and create a data flow through your organisation becomes essential.
New data taxonomy – it’s here already. The impact of Brexit, the upcoming ESG European Commission regulations and the need for FDSR/UK standards are just a few of the changes coming. Are you set up for success?

Find out more

Later in the month, Ben Lamping from Reframe Capital and Jamie Nascimento, LemonEdge’s Chief Commercial Officer, will be hosting a round-table on data.

Drop us a note if you’d like to be part of the discussion.

hello@lemonedge.com