Fintech Spotlight: State Street Builds Out Data, Digital Experiences

State Street Corp STT, a fintech serving some of the most sophisticated market participants, has announced a partnership with Canoe Intelligence to roll out cloud-based, machine learning technology that transforms private markets processing and document management.

In light of the development, Benzinga spoke with Dax Johnson, managing director at State Street.

What Happened: In a move to expand the depth and breadth of its capabilities across the investment spectrum, State Street partnered with Canoe Intelligence.

Together with Canoe, State Street is looking to increase transparency and efficiency in the private markets: traditionally burdensome processes will be streamlined, impacting delivery time. 

Johnson, who is responsible for asset and product strategy at State Street, said this development is a natural evolution of the firm, providing alternatives to market participants across emerging segments.

“We’re very focused on the interoperability of our data platform, and bringing data for our clients to life through partnerships and engagement with fintech firms,” he said in reference to the firm’s expansion and addition of units like State Street Digital, which focuses on digital assets.

Further, given changing incentive structures, among other dynamics, some of State Street’s customers allocate nearly 50% to private markets. The firm’s partnership and integration of Canoe’s open application program interface (API) will help those firms cut down on obstacles to processing alternative investment data.

“Given how large some of these allocations are and how substantial of a portion it is as part of their total program, there is a need for better information around fees, underlying company exposure detail, and timeliness of that information.”

Why It Matters: It’s been over a year since the rapid liquidation that coincided with the global spread of COVID-19. Since then, fear has lingered, resulting in broad demand for better information, in less time.

“Years ago, we were very much focused on leveraging OCR, or optical character recognition — the standard in reading unstructured information — because in private markets, it’s a lot of PDFs and emails that come in around calls, distributions, valuations,” Johnson said. 

With the growth of private markets, it’s tremendously difficult to process information as efficiently. Canoe rose to the top, Johnson said.

“They’re using machine learning and shared intelligence. As they grow, and their client base grows, the engine gets smarter.”

Visions For The Future: State Street is focused on investing in interoperable infrastructures to help investors make better decisions in emerging spaces.

Johnson said that current and future projects revolve around the firm’s data strategy and digital experience.

“How we structure data across our organization, to propel that digital experience and give our clients better access to their information ... is a multiyear journey,” he said.

“I think we’re looking at this from multiple angles in terms of ingestion, user experience, and how we can continue to build on that interoperable platform.”