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 serving as custodian of America’s first mutual fund to launching the first multicurrency accounting platform, the Boston-based bank has always focused on new technologies to help create better outcomes for the world’s institutional investors. 

Responsible for servicing 10% of global 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 make it difficult for firms to affordably store historical data, access real-time data and analyze time series data. 

Seeking to help its clients capture the breadth and depth of data generated across their investment processes, State Street decided to add to its list of firsts by developing State Street Alpha. This front-to-back asset-servicing platform helps managers make better decisions by bringing together data and analytics from across the investment lifecycle.

Requiring a modern, cloud-native foundation that would eliminate performance concerns and streamline infrastructure management, State Street turned to Snowflake to power Alpha Data Platform.

When initial development for the Alpha Data Platform began, State Street quickly realized that tuning and managing on-premises 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 extract, transform, load (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 Snowflake’s secure data sharing capabilities and seamless third-party data integrations, State Street built an industry-leading product. The platform allows for near real-time visibility across the investment enterprise. Portfolio managers can see intraday investable cash, pledged collateral, securities on loan, and risk exposures across geographies, asset classes and counterparties.

With a Snowflake-powered data foundation that offers 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 created to detect anomalies, resulting in a large number of false alerts that require manual investigation. 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 partners. Delivering a single, current source of verified data promotes collaboration between risk, portfolio, compliance and trading teams. And 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 query their data using natural language to get immediate and accurate answers.

As State Street looks forward, the team continues to strive for more firsts — especially using gen AI to benefit clients, partners and internal stakeholders. 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.” State Street engineers are developing a conversational interface to enable end users to ask complex questions about their investment portfolios. Whatever the future holds for the world of finance, State Street will continue empowering its customers and delivering results in partnership with technology leaders Snowflake and Azure.