State Street Accelerates Investment Insights by Building AI-Enhanced Alpha Data Platform on Snowflake

With banking roots dating back to 1792, State Street has long been at the forefront of financial breakthroughs. From being custodian of America’s first mutual fund to launching the first multi-currency accounting platform, the Boston-based institution has always been focused on how new technologies can help create better outcomes for its customers. 

Tasked with servicing nearly 10% of the world’s assets, State Street knows better than most how much data investment firms generate — and how siloed it can be. What’s more, unscalable data architectures can make it difficult for investment firms to affordably store historical data, access real-time data and analyze time series data. 

Seeking to help its customers capture the breadth and depth of data generated across their investment processes, State Street decided to add to its list of firsts by developing the State Street Alpha Data Platform. The first front-to-back asset servicing platform from a single provider, the Alpha Data Platform helps institutional investment managers make better decisions by bringing together data and analytics from across the investment lifecycle. Needing a powerful foundation that would eliminate performance concerns and streamline infrastructure management, State Street turned to Snowflake.

When initial development for the Alpha Data Platform began a number of years ago in an on-premises environment, the team quickly faced hurdles. Tuning databases for optimal performance would have been time-consuming and complex — especially when multiplied across all of State Street Alpha’s users. Sharing raw data sets with clients would have involved replicating and moving data via custom ETL pipelines. Growing demand for cloud-first solutions was another important factor for developing the platform. “Our data architecture needed to align with the client’s need for business agility and enable new approaches that solve traditional bottlenecks,” State Street’s Alpha Data Platform Product Owner, Jeff Shortis, says.

To provide this modern data backbone for Alpha, State Street turned to Snowflake on Azure. With its secure data sharing capabilities, seamless third-party data integration options, State Street was able to build an industry-leading product. The universal platform allows for seamless near real-time visibility across the office. Front-office portfolio managers can now quickly see the amount of investable cash or securities on loan for an account; or since risk exposure is more visible, they can optimize trades on Alpha.

With a Snowflake-powered data foundation that boasts native data security and governance, the team has been able to explore potential AI use cases for the platform. One of the State Street-built deep learning models focuses on data quality and anomaly detection. The model looks at different aspects of a portfolio to see if there are any market value issues that an analyst might need to verify. This happens in a rare circumstance when investment data is wrong, which can have a big impact on risk management models or portfolio evaluations. Typically, manual threshold-based filters are set up to help find these anomalies. State Street applied AI models, which learned to become more efficient at removing false positive alerts. They detected 100% of true exceptions and eliminated 87% of false positives — resulting in a 25x productivity gain for data operations teams who previously had to investigate each exception as a potential error. 

Self-service data visualizations from the Alpha Data Platform, powered by Snowflake, surface new insights to help investment professionals trade smarter and respond faster to investors, regulators and internal stakeholders. Delivering a single, current source of verified data promotes collaboration between risk, portfolio, compliance and trading teams. Near real-time access to large volumes of financial data accelerates time to insight at a lower cost. 

Snowflake’s powerful data access and AI capabilities have allowed the State Street Alpha team to deliver innovation faster. Data doesn’t require movement and Snowflake helps summarize and aggregate insights in near real time, so risk analysts and portfolio managers can easily query their data using natural language to get much more timely, accurate answers.

As State Street looks forward, the team continues to strive for more firsts — especially to use gen AI to benefit its customers. According to State Street CTO Aman Thind, “Gen AI will become the new standard to augment how we communicate to clients and the rest of the industry.” As such, the experts at State Street are developing a conversational interface for end users to ask a broad range of questions about their investment portfolios. Whatever the future holds for the world of finance, State Street will continue empowering its customers and delivering results.