In an environment where the only constant is constant change, reliable data becomes more valuable than ever. But with unprecedented volumes of data and unrivalled access to data, finding ways to gain clarity from these data volumes is even more critical, says Susan Strausberg, co-founder and chief executive of financial search engine 9W Search
The financial and business worlds as we knew them are gone forever, according to recent reports from both PWC and Deloitte, which cite regulatory and technological developments disrupting the economic and competitive landscape. "As smart and agile players leapfrog slower moving competitors, many businesses will be unrecognizable and the list of market leaders could be very different by the end of the decade," reports PWC's recent Project Blue report.
It's clear that the convergence of new data formats and the vast increase in mobile devices (according to The Economist's "The World in 2013" report, mobile phones now outnumber fixed-line phones, while in 2013, the number of internet-connected mobile devices will surpass desktops and laptop PCs) is leading to a new world of information consumption. In fact, the only constants in 2013 seem to be instability, global interconnectivity, and change (and an ongoing search for clarity).
To anyone who relies on financial information personally or professionally, this is a daily reality. The irony is that at the same time that we have greater access to better financial information than ever before, we are struggling more and more for clarity.
Confusion Breeds Instability
The search for clarity in unstable global times has become both an art and a science. And even governmental organizations are having difficulty mastering these to predict common economic indicators. In its April 2013 issue, The Economist noted that all advanced and emerging nations adjusted 2013 GDP growth forecasts between October and April. Clearly, it is difficult for even experienced economists to project growth and performance at a national level-and the capital markets have also faced uncertainty and adjustments in recent months.
In fact, we have seen the rise of hedge funds and other advisors who make billions in fees from the impression of insight, deep knowledge and stability in a turbulent world marketplace.
In a May 1, 2013 post on Tradingmarkets.com, David Garrard─a commentator and vice president of Asia-Pacific at Recognia─enunciated a common lament of analysts, corporate finance executives and advisors: that "In financial markets, we often experience excess as information overload and a low informational signal-to-noise ratio."
Meanwhile, in a Sept. 13, 2012 Yahoo Finance post, Daniel S. Gorfine of the Milken Institute noted that "Advances in information technology... are having a profound impact on the world," and are "decentralizing and democratizing financial markets." Gorfine feels that this shift has already impacted individual investors but is also increasing risk, as "record sums are being withdrawn from actively-managed mutual funds, to be placed in exchange-traded funds and other passive products with low fees," while others are turning to no-frills brokerage houses that offer Web-based tools for individuals to perform their own research and analysis.
Not All Data is Created Equal
Democratizing information needs more than just web-enabled tools and public-access or low-fee websites. At the core, anyone making financial decisions needs access to clear, current and complete data. Tagged and machine-readable data is the key to delivering financial clarity to both organizations and individuals who need clarity in their analysis.
Tagged data means that:
• Each number and concept is given a distinct machine-readable tag that explains its full context, including definition, calculation, timeframe, currency, and relationship to other pieces of information.
• Interactive, intelligent data can be delivered quickly across platforms.
• Information can be re-used, repurposed and compared from one organization or entity to another across industries and borders.
Tagged data in the financial world can reach massive quantities of information that some may say reaches "Big Data" proportions. Much of the data, however, has minimal relevance to the average consumer of this information. The challenge is to curate the data so that it becomes information which in turn becomes knowledge and ultimately wisdom.
In addition, according to a 2013 report by Infosys, "Cloud-based and open-source tools will help democratize Big Data to take it out of the realm of expensive resources and high-computing infrastructure-giving even smaller companies the ability to leverage big data for business insights." In a sense, the open-source tools do the heavy lifting that enables smaller companies to bring their unique expertise to the market. Because of their ability to be agile, smaller companies are uniquely positioned to bring value to the market without the need to scuttle legacy systems.
The Infosys Top 2013 Trends also predicts that "All roads lead to instant insight,"─meaning that companies and individuals will have to ensure they are obtaining the best data and that it is being processed quickly in order to derive meaningful business intelligence insights. Again, this presents a huge opportunity to the new generation of information providers who can focus on where the puck is going, rather than where it has been.
This means that the convergence of open tagged data plus distribution to all of the devices where information consumers live changes the fundamental paradigm. It puts instant insight directly into the hands of the audiences who need it to make their day-to-day business decisions, short-circuiting legacy practices that inherently slow down the process.
Primary source data lies at the basis of open data. In the case of 9W Search, there is only one right answer to a financial question, such as "What were the revenues of company X in Q3 2012?" Getting straight to the answer, and being able to save and share it, leaves users free to consider the meaning of the information relative to their own needs. The productivity gained by receiving the one right answer in milliseconds opens limitless opportunities to the end user as he puts the information to work in his own environment.
We are in a new era where the speed, efficiency and accuracy of reliable data should be commonplace. In many instances the marketplace is still complacent and unaware of the revolution underway right now. The new generation of players is waging an uphill battle, but that battle will be won once early adopters demonstrate the advantages gained from the new offerings.
The founder and CEO of Imperative Execution looks at how trade execution is changing and what that means for the buy side.Subscribe to Weekly Wrap emails
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