Data in Focus at #WFIC19
Expect a deep data dive at the World Financial Information Conference this week in Vancouver.
The four-day event “will focus on topics of interest to the global financial information industry, including a forecast on the future of the industry, market data budgets, regulation in EMEA and the US, and important technologies like cloud, big data, and artificial intelligence,” said Tracey Shumpert, Director of Member Services at the Financial Information Services Association of SIIA, the event host. “We’ll also cover newer areas of the industry like alternative data, and matters of perennial interest like alleviating the burdens of audits and new solutions like digital rights management.”
Sarah Ryerson, President of TMX Datalinx, will open Monday with a keynote discussing key trends, regulatory drivers and business opportunities in market data.
“The global capital markets industry is in the midst of a fascinating evolutionary phase as technology pushes the pace of change to unprecedented levels, continuously reshaping the landscape and redefining client needs,” TMX Group said in a statement provided to Markets Media. Ryerson, who joined TMX from Google in 2018, ”will discuss her journey to TMX during this exciting period, and how her team is working closely with clients to solve their day-to-day challenges and build a framework for enabling client success into the future.”
Exchange operators, as providers of trade-related data such as price, bid/ask quotes and market volume, are major stakeholders in the data debate. This past April, Nasdaq released TotalMarkets, which it described as a blueprint to advance markets for Main Street investors and companies of all sizes. Recommendations include changes to the Securities Information Processor (SIP), and clarification around the definitions of professional and non-professional traders.
“Regulation is understandably slow to adapt to change to ensure no unintended consequences, and we think there are some reforms that should be prioritized for the good of the public,” said Jeff Kimsey, Head of Global Product Management at Nasdaq.
Kimsey will sit on a Wednesday morning panel covering market data regulation in the U.S. and EU. The discussion will “examine how market data regulation functions today and what needs to be changed,” Kimsey told Markets Media. “I think all the participants will agree that change is overdue, but we will diverge on what changes need to be made. (The panel) will look at some of the proposals that are out there today and how the issues are being handled in the U.S. versus Europe.”
A shortage of data is rarely the issue in financial services; rather, concerns revolve around having too much data, and the resultant challenges in efficiently utilizing data. Artificial intelligence has gained traction as a way to accomplish this.
Debra Walton, Chief Revenue Officer at Refinitiv, will deliver a Tuesday morning keynote on the human side of AI, covering how quickly jobs will be replaced by machines and how smarter machines can make humans smarter.
“We are still very early in terms of the deep and widespread adoption of AI techniques in capital markets, but this adoption is a logical evolution of how data has been used in markets for the last 20 years,” Walton said. “The change is in the tools, and the accessibility of compute and storage offered by the cloud.”
Walton cited areas that AI is already working, such as algorithmic trading and smart order routing on the buy-side trading desk; robo-advising and simplified new-account openings in wealth management; and improvements in risk management such as fewer false positives in know your customer (KYC).
“The financial industry is behind many industries in how we use data to fuel AI, largely because legacy usage-based commercial models have caused consumers to build a governance moat to keep ‘expensive data’ out,” Walton said. “In order to see widespread adoption of AI, we will need to change how we think about data consumption, governance, engagement and commercial models to truly liberate the power and possibilities of data.”
One notable growth area within data in recent years has been alternative data, which is roughly defined as any input outside of traditional market data. Alt data has proven itself as an alpha generator for investment managers; the challenge then becomes logistical.
“As the number of emerging alternative data sources increases, it is a challenge to make sure these new data sources are compliant, efficient and secure,” said Lauren Stevens, Senior Strategist, Content & Technology Solutions at FactSet, who will participate on a Tuesday afternoon alt data panel.
“Alternative data is quickly being adopted by more asset managers and investment banks who are looking to new data sources, such as satellite imagery, shipping feeds, and news sentiment scores to feed their investment strategies,” Stevens said. “While alternative data can provide enlightening insights, it also can be cumbersome, voluminous, unstructured and complex to vet. On the panel we will be providing ideas on how to best review and engage with new data vendors.”
As per usual at professional conferences, some of the best conversations will take place outside of the panels, on the sidelines in the context of one-on-one, relationship building and business development.
Chris Dearie, Deputy CEO of TP ICAP Data & Analytics, expects to do a lot of listening. “As a supplier of content and solutions I want to hear, discuss and understand the key themes impacting clients,” he said. “What problems need solving, are there opportunities they need partners to help realise?”
“How are technologies such as cloud, AI/ML and analytics changing clients access, ingestion and analysis of data?” Dearie continued. “We know people are seeking more direct access to raw content, how can we help analyse it and add value? What services do they need to support the ongoing regulatory environment they operate in? What new types of data, for example alternative or emerging markets, do clients want to access?”
Deal combines Knoema’s knowledge management platform and data repository with Adaptive’s alternative data.
AI and machine learning have supplanted trading speed as a differentiator for capital markets firms.
Focus areas include listings, ESG data, and sustainable bonds.
Is it time to revisit and expand the Gramm-Leach-Bliley Act to include fintechs?
The new offering for Japanese institutional investors is set to go live in December.