Dan takes a look at how Twitter usage continues to grow among financial firms.
Editor's note: The announcement of CBOE Holdings agreeing to acquire Bats Global Markets this week was big news for the sell side. Naturally, I'm interested in discussing it. I figured it'd be best to talk to WatersTechnology US editor Anthony Malakian about it on our weekly podcast, the Waters Wavelength. We'll release the episode tomorrow here, on Soundcloud and on iTunes, so be sure to subscribe and give it a listen. In the meantime, instead of stepping on the podcast, I decided to touch on a completely different topic for my weekly column.
How much is a tweet worth? To some financial firms, quite a lot.
Anthony Malakian, WatersTechnology US editor, wrote a piece this week looking at how machine learning is helping financial firms sort through social media's "noise" to find valuable information.
The story, which was based on a panel at the Chicago Trading Technology Summit, examines techniques used by firms to make real business sense of platforms that generate millions of individual pieces of data a day.
"One of the challenges of social media when compared to news is the trust factor," Lovas said. "News—one would hope—is coming from a reliable source and there's a certain level of trust that it is trustworthy so that you can more easily apply it to your event analysis and market impact forecasts. In the case of social media, while it's not impossible, it elevates the difficulty to find whether a Tweet is actually real or just malicious in nature. Putting trust on that is a huge challenge."
This, to me, is the crux of the issue around firms using sites like Twitter. While there is no doubt a ton of valuable information on the platform, there is also a lot of nonsense. For every valuable source of data on Twitter, there are also a handful of fake accounts/bots/trolls.
Legitimacy to the Platform
That's why a bit of news this week caught my eye. Bloomberg has added a new feature to the terminal that will now make it possible to tweet directly from Instant Bloomberg, the vendor's chat service.
While some might not see this as a monumental moment in the journey toward bridging the gap between Twitter and financial services, I do think there is some substance to it.
Twitter has had a tough go in recent years. After fast initial growth, Twitter's user population has plateaued over the past few years. The company also continues to report negative net incomes annually. All of this has left many questioning the firm's future.
Now, I hardly believe Bloomberg allowing its subscribers to tweet directly from Instant Bloomberg will save the company, but I do think it will help with financial firms' usage of the platform.
It's natural for users to be more likely to use a particular social media platform if it's more accessible. If terminal users, which make up a significant amount of the financial market, can easily tweet, it can only mean good things for Twitter's relationship with financial firms.
As users become more comfortable with Twitter, they'll tend to use it more. That, in turn, means there will be more information from valuable sources on Twitter, increasing its value to financial firms.
Will Bloomberg save Twitter? No. But it certainly isn't hurting it by making the platform more available to its users, and I think an increasing number of financial firms will see the value in that.
Anthony and James look at developments pertaining to the Consolidated Audit Trail and wonder if big-tech companies could challenge traditional asset managers.Subscribe to Weekly Wrap emails
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