Max Bowie: New Data Types Need a Big KISS

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As market data becomes more voluminous and more complex, Max says providers of new content and the technologies for making sense of it are not only expected to provide clarity from the data, but also guidance on how to get the most out of it so potential clients can easily use it alongside traditional tools and content.

Applying the principle of KISS—Keep It Simple, Stupid—can benefit almost any business function. And with the financial markets seeking to incorporate new data types and big data analysis into investment decisions, the ability to simplify a tool or dataset’s function—and its proposition to potential users who stand to gain an advantage from using it—is more important than ever.

Challenge
The challenge is this: You can build all the smart content and analytics in the world and parade it in front of traders and investors, but if they don’t “get” it, they won’t use it.

Leigh Drogen, CEO of crowd-sourced estimates provider Estimize—which just unveiled its new Select Consensus weighted estimate—recently explained the quandary of being at the cutting edge of new content: While some clients already “get” how Estimize’s crowd-sourced consensus estimates can beat the traditional consensus of Wall Street analysts, others need a little help understanding how they can make money from it. So, to demonstrate this, Estimize is running the kind of testing that its clients would want to perform, making the results available on its website to serve as suggestions of how users could exploit the data.

It’s not just Estimize having to show people the way: Chicago-based data and investment research provider Morningstar is adding commentary to its recently launched quantitative ratings, to provide additional context for investors, while ETFGuide—which provides research on exchange-traded funds—sees potential to expand beyond the retail space and bring its research to institutional investors and traders via broker trading platforms, to bring more context to the burgeoning exchange-traded fund (ETF) market via platforms they are already familiar with.

Meanwhile, fund flows data provider EPFR Global is releasing a set of new reports—collectively dubbed ChartBook—that provide commentary on fund-flow trends between asset classes and geographies, to provide a series of ready-made investment ideas for subscribers, and also to point them in the direction of how they should be looking at the data to develop their own ideas.

You can build all the smart content and analytics in the world and parade it in front of traders and investors, but if they don’t “get” it, they won’t use it.

Desperate Search
In a recent contributed article in sibling publication Inside Market Data, Susan Strausberg, CEO and co-founder of financial search engine 9W Search—and former CEO and co-founder of financial filings data provider Edgar Online—described the impact that increased data availability is having on the financial markets and their participants, resulting in a desperate search not for data, but for clarity, with the acknowledgement that while knowledge comes from information, making that knowledge valuable comes from being able to ascertain the right information from the deluge.

While some firms say, “Give me all that data, then go away and don’t look at what my rocket scientists are using it for,” others also want some tools—the data equivalents of picks and shovels, if you will—that help them mine valuable nuggets of information from what at first appears an impenetrable rock face of data, while others still need a certain amount of guidance and hand-holding before they become comfortable with something completely new.

Burden
And in these circumstances, vendors are finding that the burden is on them to demonstrate its value much more so than in the past. When a potential client knows what it wants, and you have a product that achieves it, the pitch is easier than convincing a prospect of the value of something they haven’t yet thought of themselves.

So, if you’re having a hard time getting clients to fall in love with your latest and greatest, just pucker up and give them a KISS.

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