How Vanguard is overcoming the novelty and skepticism of big data

How Vanguard is overcoming the novelty and skepticism of big data

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Big Data and AI use cases

For a CIO in a service provider business, it's not a foregone conclusion that you'll lead the company charge in areas such as big data. At Vanguard, however, roughly 96 percent of our client contacts come in via web and digital channels. When your technology channel essentially is your channel, there are times when IT really does have to step it up and lead the way. Big data is one of those times.

Moving beyond “Okay, I've heard this before.”

The novelty of the technology and the resulting skepticism that it can sometimes produce is the primary reason why our IT division is leading Vanguard’s adoption of big data. We started by slowly building the necessary ecosystem, leveraging technology such as sophisticated data visualization products, database accelerators, distributed data processing frameworks, and data integration tools. Our CTO office was charged with leading our big data agenda — an especially tall order given that we have accumulated a decade’s worth of information warehouse technology in our environment — and we’ve taken the approach of partnering with various business groups to look for small-scale experiments.

These small experiments are leading to large-scale production implementations in areas such as our Institutional business. Having an IT organization with a solid understanding of the technology and our business has led to increased excitement and adoption. In short, we’re able to help our business envision the use cases and the possibilities. That gives us the ammunition to “sell” big data as a real tool the businesses can use.

Starting with big data? Start with governance

As we progress, we’ve established governance forums to connect big data efforts across the company. We have several levels of groups that collaborate, from senior leadership to working teams, to share ideas, best practices, and education. And, anywhere we can reuse the actual technology is a bonus.

A key enabler of these efforts is our data governance program. This program builds the foundation for effective use of data, big or small. While our data architects and process engineers are ultimately doing the work, we have a sponsoring business program that funds and drives it. It’s critical to identify business stewards who will be accountable for the data and give them the tools to effectively manage it.

It’s vital to get the right people together to work on these projects. For example, Vanguard’s centralized, cross-functional Client Insight group had already been putting analytics to use for years. In this case, we already had the right people integrated, and, now, big data enables the Client Insight team to combine the disparate data sources they use more seamlessly than before.

So what are we seeing thus far? For instance, the primary goal in our institutional organization is to help our participants save for retirement. Big data is already helping us to take a more mature, behavioral finance-driven approach to our participant education efforts, so that we can suggest the right savings actions at the right time for them.  In turn, they are saving in a way that meets their long-term financial objectives. On the investment side, big data is giving us the ability to invest more efficiently in our portfolios, and look at risk management in a more holistic manner. IT may have been the first believer in big data at Vanguard, but everyone is now starting to envision the possibilities.

John T. Marcante is Vanguard’s chief information officer and managing director of Vanguard’s Information Technology Division. Vanguard is the world’s largest mutual fund company with more than $2.6 trillion in global assets under management. Marcante oversees all aspects of Vanguard’s worldwide technology agenda to serve clients and manage investments. Mr. Marcante, with more than 26 years of experience in the business and technology fields, joined Vanguard in 1993. After serving in a number of leadership roles throughout the company, he returned to the IT division in 2012 and was named Vanguard’s chief information officer and managing director.

John T. Marcante is Vanguard’s chief information officer and managing director of Vanguard’s Information Technology Division. Vanguard is one of the world’s largest investment management companies. As of December 31, 2017, Vanguard managed more than $4.9 trillion in global assets.

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