Panelists at the Asia-Pacific Financial Information Conference mulled the value of new types of data, but warned that increased transparency may only lead to increased noise, and that the jury is still out on whether the cost of separating out valuable information from new sources is worth it.
“What is really noticeable is how accessible data is nowadays—the retail world can actually trade the markets, not just spread bets of contracts for difference—and how advanced services are,” said Ben Collins, sales director for real-time data at Morningstar.
Ironically, this accessibility has led to the demise of prior transparency tools such as indications of interest, said Ipug executive committee member David Berry.
Instead, these are being replaced by user-generated content, such as data collected from bulletin boards, Twitter and other social media tools that are increasingly being utilized by investors. “We see real value in bringing that user-generated content into an ecosystem, meshing it with market data in our platform and creating a consolidated view of the market for retail clients,” said Cedric Roll, chief technology officer of Hong Kong-based startup broker 8 Securities.
“In this day of Facebook and similar sites, people are either digital novices, digital immigrants or digital dinosaurs. People now expect an interface like they have on their iPhone… and they want to take that and build indicative data items,” said Jeremy Green, global head of market data at Standard Chartered. “And in the next few years, we’ll have a generation of people who expect this as standard.”
However, while acknowledging a “scale of value to this information,” Berry argued that this information should not be placed on a par with other market data. “When we set up a financial product, we need an audit trail because we have regulators who are scrutinizing the inputs we use to make decisions. And a tweet is not data. Nobody is going to start issuing products based on tweets,” he said.
James talks about his trip to Chicago and some of the interesting topics that came up (including a look at disaster recovery demands). Then Anthony and James touch on ISDA's initial margin rules, with Phase 3 going live next year.Subscribe to Weekly Wrap emails