One of my favorite TV shows is Bar Rescue, where bar industry expert Jon Taffer turns around failing watering holes in a matter of days. One reason I enjoy the show is its similarity to issues in the world of market data, and how Taffer uses data to make his case for why bar owners should change their menu, their ambience, or their target demographic.
For example, when deciding what to serve, Taffer and his team analyze the local marketplace and average local income, compared to the national average. Or when deciding how to brand the bar and what to offer, he looks at the potential consumer base in its immediate area, such as how many people work locally, what kind of jobs are they in, and how much they are likely to eat, drink and spend, and when. For example, should a bar quit serving dinner if its patrons are commuters who leave the area by 6pm?
It reminds me of how a market data manager would identify the data needs of employees across a firm’s front, middle and back office to determine what data products would be most productive and cost-effective.
In addition, Taffer frequently employs a company called Bevintel to monitor actual liquor consumption. Simply put, Bevintel weighs every bottle of spirits to measure the amount of liquid inside, then replaces them for use by the bar staff. After the next shift is over, Bevintel weighs the bottles again to determine how much has been served, and compares that against the bar’s takings to conclude whether every ounce of liquor was paid for, or whether bars are losing money because staff are over-pouring or serving free drinks.
Perhaps this reminds you of market data inventory management systems that reconcile the number of positions paid for against the number of people actually employed, or that monitor how much data an individual uses from a particular service, to determine whether they warrant keeping an expensive service, or could make do with a cheaper alternative.
What interests me about this is the use of new ways of thinking about running a business—one of Bar Rescue’s taglines is that running a bar is a science—through using data to guide decisions. And that’s a theme we’ve seen play out in other industries as well, including sports—such sabermetrics in baseball, which spawned Michael Lewis’ bestseller Moneyball about the Oakland Athletics’ use of statistics to pick playoff-worthy team in 2002—and especially in the world of financial data.
And while these concepts may be new to some industries, the market data industry is already well versed in them, and is finding new ways to adapt these concepts to deliver greater accuracy and insight. For example, in the case of inventory management systems, vendors such as Simplified Financial Information are monitoring the data traveling over a network—and who it travels to—in real time, providing more timely and accurate insight into usage.
The modern trends of analyzing data and statistics in new ways are evident throughout this week’s IMD: from Cowen Group’s short-term alpha model to Fincad’s new analytics for asset liability, pricing and pre-trade analysis, risk management and CVA calculation, as are the additional issues that this data availability brings with it, such as the challenge of spotting trends and deriving value from the data.
The next phase of innovation will surely be finding new ways to make users interact more with their data, and tighter correlation between related data to make relationships more apparent—the data equivalent of Taffer’s “butt-funnel” invention (look it up).
So, if there are two lessons for data professionals, one is that data is always growing and changing, and there are many more ways we can use and extract value from it—though inspiration may come from other industries f; and second, if you like a long pour, check the list of bars visited by Taffer… and go somewhere else. Cheers!
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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