This episode features an interview with Warren Breakstone, Managing Director and Chief Product Officer at S&P Global. Warren has previously been the Senior Vice President of Operations & Technology at Thompson Reuters, and has also served as a Vice President at The Chase Manhattan Bank. In this episode Warren talks about the versatility of movement data, the role S&P’s data plays in informing COVID-19 decisions, the future of financial services, and much more. So please enjoy this conversation between Warren Breakstone, Managing Director and Chief Product Officer at S&P Global and your host, Steve Hamm.
This episode features an interview with Warren Breakstone, Managing Director and Chief Product Officer at S&P Global. Warren has previously been the Senior Vice President of Operations & Technology at Thompson Reuters and has also served as a Vice President at The Chase Manhattan Bank.
In this episode, Warren talks about the versatility of movement data, the role S&P’s data plays in informing COVID-19 decisions, the future of financial services, and much more. So please enjoy this conversation between Warren Breakstone, Managing Director and Chief Product Officer at S&P Global, and your host, Steve Hamm.
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Warren Breakstone: [00:00:00] Hi, Steve. Nice to meet you.
Stephen Hamm: [00:00:01] Hey, nice to meet you, Warren.
I wanted to talk a little bit about the history of, of S and P cause I think, you know, there's been so many changes, over the past decade S and P global is the name of the company. Now it was formerly called McGraw-Hill companies is divested the trade book, publishing textbook TV stations, bunch of other businesses.
And focusing on information services for the financial services industry, which was a core piece of the business. So it'd be helpful if you would describe kind of the main businesses that S and P has now.
Warren Breakstone: [00:00:38] Right. And there has been a lot of change, both in the company, but also in the markets we serve and our client needs. And I like to think that as those client needs have evolved, so has S and P global. under the leadership of our CEO, Doug Peterson, we've really transformed the business to focus on delivering what we term essential intelligence through must have data and solutions to help our clients make decisions and be able to make those decisions with confidence and conviction.
We're organized today around four divisions. Each division is a leader in their respective markets. first and our largest is S and P global ratings. It's the world leading provider of credit rating and research that serve to drive transparency in the capital markets. Next is a S and P Dow Jones indices. it's the largest global resource for index based concepts, data and research, and home to the S and P 500, which is the most tracked index in the world by assets under management. Plats is our third division. It's the leading independent provider of information and benchmark prices for the commodities and energy markets.
And then lastly, we have our S and P global market intelligence, which provides data research and technology along with analytical capabilities that enable our clients to make business and investment decisions. And the data and the analytics are delivered through our desktop solutions, express feed, which is our, bulk data feed, delivery, API APIs, and now cloud delivery, including from snowflake.
additionally, back in 2018, we purchased Kensho, which is a leader in machine learning and apply data science. And we now have those capabilities and talent from Kensho supporting all four of the divisions to help us build and enhance content and products, automate and scale processes, and also to benefit from the Ken show data scientists.
Stephen Hamm: [00:02:36] Warren, you've done a great job of describing the company's business, but it'd be really helpful to understand how you fit in. What's your role there?
Warren Breakstone: [00:02:45] thank you for asking. so, I work, in the market intelligence division and I'm responsible for our data management solutions, true cost, which is our, climate and ESG franchise and, CUSIP, which is our, identifier business, which we, operate on behalf of our partners at the American banker association.
on the data management solution side, we're very much focused on data innovation, and delivering that data to our clients through, feeds and API APIs and cloud-based distribution, and then help our clients to layer on their own analytics and tools and machines on top of it.
Stephen Hamm: [00:03:24] What does CUSIP stand for?
Warren Breakstone: [00:03:27] you know, you and I have a social security number, well, CUSIP provides that type of service for a issuers and instruments.
Stephen Hamm: [00:03:37] Okay. Within financial services and are all your customers within financial services or do you kind of cut beyond that?
Warren Breakstone: [00:03:44] Well, actually, we cut quite beyond that. our clients range from, large, investment managers and pension funds to, investment banks, commercial banks, insurance firms, and corporates and academics. So, what are the benefits of, a and P global is really the diversity of our client base.
Stephen Hamm: [00:04:06] Now you've been in the data technology and of the financial service business. Four quite a few years now at S and P global earlier at Thompson and at chase Manhattan before it became JP Morgan, how have you seen this market segment change over the years? What are the big business trends and business drivers?
Warren Breakstone: [00:04:28] Well, I've been very fortunate to work in the financial services industry for about 25 years. There's been tremendous change over that time, which is very much tied to the evolution in technology. I remember early on when we would be out speaking with clients about a new data set or solution and they consider it, but only if it really replaced something else that they were relying on.
as they didn't really have the capacity to take on something new, they didn't have the storage capacity, the processing power capacity, particularly if it was a desktop application and they really didn't have the time. just to give you a sense about how much has changed. back in the early 1990s, a terabyte of storage could cost you tens of millions of dollars today.
You can get. A terabyte of storage on iCloud for about $10 a month and half that on many of the other cloud providers. A gigahertz of processing power back then my cost, you the equivalent of a small house in San Mateo today, it's the equivalent to a cup of, Pete's coffee. and you don't even need to buy the processing power anymore.
You can really, you can rent it. from snowflake or any of the other cloud providers. So storage is no longer an issue. processing power is quite plentiful. and now our clients are taking advantage of the technology innovations that these advances have allowed for, whether it be incorporating machines or big data analytics, AI, new research techniques.
and at the same time and probably to a large degree because of it, there's also been this explosion of new data. A lot of it termed alternative data, really allowing clients, the raw materials to fuel these processes and tools. It's certainly really been quite the journey.
Stephen Hamm: [00:06:19] You talked about alternative data. I mean, in a sense, you know, it used to be. A lot of the analysis of that it was done was very narrow. But now with this alternative data, it's really all sorts of contextual and kind of understanding whole systems and how they interact with other systems. Right. Or what's what's going on there.
Warren Breakstone: [00:06:43] Well, I think when you strip away the marketing, alternative data is at its core data it's data that was, perhaps originally designed for one use case and is now being used for a different use case for which it was really never. Intended, now that data is often poorly structured. It could lack history, may have some gaps, very difficult to ingest.
And that's where a provider like S and P global really adds its value. what we're seeing is that as clients. Really start to rely on this alternative data. Their expectations have begun to converge with those expectations that they have already for the traditional data that they already utilize. whether the data is alternative or the data is traditional clients ultimately need confidence.
They need confidence that the data will be comprehensive. it will be accurate without gaps that it will be consistently structured for their analysis. it often needs to be complemented with other content to extract full value. and if there's a problem, they have someone to call, to, to fix it.
So my sense is that the label alternative data will likely soon disappear and it'll all just be referred to as data.
Stephen Hamm: [00:07:59] Yeah, that's really interesting. You know, Frank Slootman, the CEO of snowflake, you know, he talks about big data because people have been talking about that for years and he says, we don't even use that term. It's all just data, every, every which kind. And you've gotta be able to deal with it all. And you've got to be able to integrate it all.
So it's some of these distinctions that were so important in the past really have kind of faded out as things have become more mainstream. And, and I guess more as technologies and thinking has been more matured, in the business. Yeah. Now I know that one key piece, one of the key pieces of SNP global is the market intelligence division, which I believe you came up in and it seems like.
A lot of your innovation is happening in that area. If you could kind of talk about, you know, the growth in that business, the, you know, the competitive landscape, the, the innovative landscape. I think that would be really helpful.
Warren Breakstone: [00:08:58] Well, Steve there's, there's a lot of innovation happening across the entire S and P global organization, in market intelligence. it really starts with the data we aspire to offer the highest quality, most comprehensive and relevant content to help our clients make decisions, data data's accurate.
with deep history, some of it going back as far to the 1950s, and structured in a way that allows clients to get maximum use from it. I then we're able to deliver that data to the client, to our clients, the way that they desire, whether it be a desktop solution such as our market intelligence platform or capital IQ, desktop express feed, which is our data feed solution, API APIs, cloud hosted delivery.
but it all really starts with the content. we pride ourselves on high quality, comprehensive data. And as far as I know, we're the only provider who supports that pledge with a quality program where if a client finds an error in our traditional data sets, reports, it. We'll do a root cause analysis.
We'll fix it at the core. We'll check for other errors like it, and reward the client with a $50 contribution to their charity of choice or an Amex gift card. So it really is putting our money behind our pledge.
Stephen Hamm: [00:10:20] Yeah. As long as you don't have too many of these, you're fine, right?
Warren Breakstone: [00:10:25] Very true. But we. but we, we were happy to pay it out because, even though we have, skilled analysts and sophisticated tools and thousands of quality checks when you're dealing with as much data as we do, sometimes an error does get through. And in those cases we've paid out a fair share. and many of our clients, some are interns have earned some meaningful spending money.
but every cent we pay out it, frankly, as an investment, along with our, systemic Emmanuel quality checks, it plays a role.
Stephen Hamm: [00:10:58] And it also sends a signal to your own people. How important quality is? It's kind of part of a culture of quality, I guess.
Warren Breakstone: [00:11:05] very much so, we use it internally to help shape our culture, frankly. focus on quality across everything we do. In fact, we measure, we report re remunerate everyone in our organization against content quality scores, and we found that to be an important sort of unifying purpose and principle.
Stephen Hamm: [00:11:22] Now let's talk about some broad trends in terms of data. What are you hearing from your clients in terms of how they want to interact with your data? Things changing there?
Warren Breakstone: [00:11:34] Very much so good question. our clients are increasingly interested in being able to bring data directly into their environments and to their systems, into their databases, their data warehouses tools, and then layer on their own proprietary analytics, data science tools, and approaches to help them make better decisions.
Whether it be an investment decision, or a business decision. And while this is not a new trend, it is certainly one that's gaining increased importance across all the segments in which we operate from investment management and banks, insurance firms, corporations, they're all looking to unlock data and technology to their advantage.
and at the same time, our clients are also overwhelmed with data, their own data, traditional data. Alternative data, derivative data, economic data, satellite data, you name it. And they have to spend a lot of time and effort to ingest that data to structured, clean it database. It, all of that time would be better spent on the analysis itself.
by one report, 90% of the world's data has been created just the past two years and it's not slowing down. So this is an area where we really very much look to help.
Stephen Hamm: [00:12:46] Now in the spring of 2020, you launched the S and P global marketplace, and it seemed like this was a pretty significant new product launch. Cool. What's new and different about this and why, why is it a big deal for your customers and also for S and P global?
Warren Breakstone: [00:13:03] Well, it's a big deal for our customers and it's a big deal for S and P global. it was a very important milestone for our organization. The S and P global marketplace is a platform that helps clients to explore, discover, assess data from across all four divisions of S and P global, along with select third party alternative data, which we carefully curated.
and for the first time includes solutions from Kensho. And others that allow our clients to even get more out of the data that they already use. So all the data is linked to ensure quick client adoption and supported by our own proprietary quantum mental research enhance with data visualization, data dictionaries, access to code snippet, libraries, and much more all on the same marketplace platform.
And all the data on the platform can be sampled on the spot and also delivered through our express feed FTPs API APIs. And now our cloud distribution response has been fantastic. And we have a long pipeline of exciting content and capability enhancements to come.
Stephen Hamm: [00:14:15] So one of the things this does, it seems like is exposes the whole array of your customers, all of the segments to the whole array of your data for the first time. Is that correct?
Warren Breakstone: [00:14:27] That's correct. And it's not just our data, it's our data. It's select alternative data and now solutions that will help those clients even get more out of the data and their own data for that matter.
Stephen Hamm: [00:14:40] Yeah. Yeah. Hey, a crazy question, but is there some really very interesting and unusual data sets that you have within S and P global marketplace that people might be surprised to hear about?
Warren Breakstone: [00:14:54] Well, as far as interesting categories of data that we offer on the marketplace, we offer nearly a hundred different data packages today, from our a well-regarded copy stat fundamental data to Platz commodity pricing CUSIP. Along with SNL asset, late level data, and of course S and P ratings. We're also investing heavily in some new categories.
the top three categories of interesting new data now available includes ESG, where clients are increasingly looking to incorporate climate analytics into their decision processes, or we offer the full gamut of data from true cost, as well as from our S and P ESG scores, physical and transition risk.
The second category is tech sure. Data. I think nearly 80% of the world's data today is unstructured. So we're going through the effort to help structure that content to be machine-readable today. We offer machine readable earnings, call transcripts for something like 14,000 companies. And we've recently introduced with our partners, social market analytics, our machine readable filings as well.
We also offer our suite of textual data analytics, which include 39 different sentiment behavioral scores on top of our earnings transcripts and with a newly announced partnership, we also offer unique Asia specific earnings call transcripts from scripts Asia. In the coming months, we're going to be extending textual data to include court cases, patent data and credit research as well.
I think probably the third category, which we're most interested in is what we term movement, data people, movement, goods, and money. we just added a foot traffic, a set of data from air Sage, which helps us track people, movements, which we then overlay on top of our re property database to help inform on the health and vitality of a physical location.
You know, we, we know what happens when a toys R us goes under, but what happens to the store next door? What happens when a Starbucks opens in the neighborhood, and we're already today a Prebid and provider of supply chain data under the brand pin Jeeva, which now is further enhanced with our ESG data from true costs to understand the impact of climate and distribution risk.
we can go on and on it's it's like being a kid in a candy shop.
Stephen Hamm: [00:17:18] I'm fascinated with that movement data. I think that's really something I've never heard of. And I, and really interesting and also just about the ESG data, the climate stuff. So that suggests, so people often talk about weather data and how important that is, but you're actually talking about data related to climate change and what impact that might have on business and other activities and things like that.
Correct?
Warren Breakstone: [00:17:43] That's correct both to understand the physical risk of climate change. But also to understand transition risk as, countries around the world introduced new rules and regulations, and what the impact that impact would be on particular companies, and, portfolios. So that's very much a big focus area for us, both to understand risk, and, manage risk, but also to understand opportunities, we just introduced a new product, which helps companies gauge the positive impact of, their efforts and activities.
Stephen Hamm: [00:18:23] I think there'll be, there will be surprising changes. Out of climate change and some will be, some will be, you know, negative and some will be positive. I think that's pretty clear now.
So I know that sounds like a great product too. So I wanted to talk about data sharing. Now, traditionally, as a peak global has transferred data sets to clients via a web based products. You got, you got express feed, you got API APIs, which is application programming interfaces. But now you're also partnering with snowflake and I understand you plan on sharing data with clients via snowflakes data marketplace, which is part of snowflakes cloud data platform.
What do you what's what are you looking at? What are you planning? What's the attraction of that? did exchange.
Warren Breakstone: [00:19:16] Our clients have different needs. And it was very important for us to find a cloud agnostic, secure solution to further enhance and enable our distribution for our clients. SMP working with snowflake, allows them to access our data via their cloud provider of choice. and it removes an important hurdle for them relating to the need for expensive development resources on their end to load manage data.
It also enables them to gain access, to compute power and run large complex queries against our data without any resource contention. And that's it increasingly important as data continues to get bigger and bigger. Clients can benefit from, the architecture of snowflake, which serves to separate compute from storage.
And as a result we found allows for better query performance. and for our SMP global marketplace, you know, eight and, allows us to be able to offer a cloud hosted option for our clients to compliment our existing and robust existing delivery channels. and frankly it opens up new opportunities for us around the world to effectively help them.
Solve our client problems. and maybe a last point. we also like that there are many preexisting and, fit for purpose, visualization and analytical tools, which were already connected via snowflakes. So these capabilities can really be brought to bear, to further enhance our client experience, with our data, and, help them as they look to make, investment and business decisions.
Stephen Hamm: [00:20:53] Are you talking about like Tableau and Looker and things like that, or,
Warren Breakstone: [00:20:57] Sure. both of those and many others as well.
Stephen Hamm: [00:21:00] And do you see AI becoming a pretty important part of what you're doing?
Warren Breakstone: [00:21:05] I think AI both and how we apply it internally with, the benefit of having the Kensho franchise lead the way and also how our clients are looking to leverage AI machine. Machines machine learning, natural language processing and their own processes has really opened up a big opportunity for us. And that's one of the reasons that we're investing so heavily in, making textual data available to our clients in machine readable fashion.
It really is designed to allow our clients to get much more out of those investments they've made on AI and machine learning and the like.
Stephen Hamm: [00:21:45] I, I really want to explore a little bit more something you were talking about a minute ago with S and P global marketplace. And you talked about, you're going to have a version of that that runs in the cloud and runs on snowflake. What are the differences between, you know, Both of these things are brand new, but can you give a sense of what the differences are between the two platforms and , why a customer would, would want to be on one rather than the other?
Warren Breakstone: [00:22:14] Well, I don't think it's a question of one versus the other. I think it both brings something unique to the table and by having, both, the opportunity to work with marketplace as a platform to, discover and evaluate, various data. you'll also now with snowflake, have the ability to, Via cloud distribution, bring it into your environment and to benefit from the use of snowflakes compute on top of the data.
So I think it's really, bringing together, to different and, complimentary, solutions to drive additional value and benefit for our clients.
Stephen Hamm: [00:22:55] Yeah. Yeah. Help me understand though, what does the snowflake technology enable you or your customers to do that they can't do or can't do as well in another environment?
Warren Breakstone: [00:23:09] Well, We're big fans of snowflake and the ability for our clients to be able to benefit from, the, the, the natively, cloud architected solution that they're able to offer. the ability to get access to compute power, really good compute power can further, enable our clients to get value out of the underlying data that we're able to offer.
So we're big fans of that, from snowflake. we like also the fact that it's cloud agnostic. So many of our clients, some of them are on AWS. Others are on Google, others are, using, assurer or IBM or, or the like, and that's fine when, when, when you work, the, when we design a solution, the way we have, we'd like to be agnostic, to be able to deliver our data the way that each individual client wants to receive it, and benefit from it.
Stephen Hamm: [00:24:03] So you're going to launch with snowflake and, are you launching with the entire portfolio of data offerings or are you launching with a limited and then expanding later? What are the plans there?
Warren Breakstone: [00:24:17] Well, we're launching with a lot. we're prioritizing, our data based on client demands. So we're initially launching with all of our premium content sets, our fundamental databases or estimates, ownership, transactions. cross-referenced services along with our P supply chain. And we plan to continue to add, what I would expect to be our full roster of both traditional and alternative data.
And I'd imagine that our full catalog will be exposed on so flake over time.
Stephen Hamm: [00:24:48] Now we're speaking in the midst of the COVID-19 crisis and I understand that S and P global has done some kind of interesting and meaningful things that are kind of altruistic. and I wondered if you could kind of delve into some of those efforts that you've been involved in.
Warren Breakstone: [00:25:08] Well, we're all being tested every day and we're constantly looking for ways to support each other and our clients along with the communities we serve. And it's never been more important than during this COVID crisis. and there are a few ways that, we've tried to, drive some value during the pandemic.
first, we're providing, critical data that can help inform healthcare and governmental officials. for example, we have a very unique product. I referenced earlier called pan Jeeva, which focuses on supply chain and covers roughly 40% of global trade and something like over a billion shipping records.
So we know what's on those cargo ships. We know what's in those containers, the value of goods being traded, the source and the destination. So very powerful. So we've used that solution, and we've been able to make information now available to hospitals and governments to track and identify the shipment of PPE ventilators and 95 masks, which has been enormously useful, especially during the very early stages of the pandemic.
Second, I'd say we've, we've focused our research teams, including those from research four or five one, which we acquired last December, to develop COVID related analysis, to help inform, and assess the impact, on the economy companies, supply chains and markets, and we've made these reports and those from our quantum mental research team available for free on our website and a distribution.
and probably third, I'd say that S and P global, through our foundation has been very generous with, monetary contributions to local communities in need. I'm very proud to be part of this team.
Stephen Hamm: [00:26:51] just on a very practical basis, that analysis that you've made available on the website, is there, is it just right there on the, on the, you know, on the top line or is there, are there, is there a key word or two that people should know to look for it with?
Warren Breakstone: [00:27:07] It's right up front. we have our website very neatly organized and, you'd look under a research, and should find it. Additionally, it's also available on, our, marketplace solution. the URL for that is a marketplace dot SP global.com.
Stephen Hamm: [00:27:26] That's very helpful. you know, things have settled out a little bit, but you know, it's amazing how little we still know about the behavior and the nature of this virus in this disease. So, you know, the, the idea that, that we need, even more data, we need even more connections. We need even more analysis.
I mean, Hopefully the worst of the crisis is over, but I think that there's going to be a lot of need for analysis going forward and also to help make society and the economy more resilient in the future. I think that is an area that not too many people sort of thinking about, but I bet your people have,
you know, you've seen such tremendous changes in your industry or the last 25 years. I want to ask you to be a bit of a visionary.
Now looking out ahead five years or more, if it's not too murky, how do you see data and data analytics affecting financial services?
Warren Breakstone: [00:28:26] that's a great question. There's a great quote that I, that I very much like, it goes something like this, a machine will always beat a person, but a person with a machine will always beat a machine. And I think that is really the essence of where we are heading the ability to help our clients unlock the benefit of technology.
Combined with our own data and analytics to help make better decisions quicker. And with conviction also, Steve, the ability to continue to help eliminate the noise, with so much data being spun up, in different areas each day, in normal times. And now even more so during this COVID pandemic, it's really important and vital to be able to distinguish what is meaningful early on in the process and not to waste time, resources and money.
And I think S and P global is uniquely positioned to help our clients benefit from this trend. And our partnership with snowflake will certainly help get us there.
Stephen Hamm: [00:29:36] That's great. Warren, I want to thank you so much for your time today. I mean, I really think your stories, your insights have been fascinating, you know, thinking about movement data. I hadn't really thought about that. And also. I, you know, I knew that there was a lot of assessment of climate change, risk and opportunities coming up.
But to know that you have a product built around that is, I think is really important and really fascinating as well. So this has opened my eyes in some ways. I want to thank you so much for your time.
Warren Breakstone: [00:30:05] Thank you, Steve. I appreciate it very much.