Mosaic Smart Data Aims To Diversify, Expand
Mosaic Smart Data, the fintech which provides real-time data analytics for capital markets, will use funds from its latest investment round to move into new asset classes and to grow internationally.
Matthew Hodgson, chief executive and founder of Mosaic Smart Data, told Markets Media: “The funds will be used for product development as we expand into equities, for R&D into machine learning, so we can provide more analytics, and to expand in the US and Asia.”
He launched the company after finding it impossible to get a consolidated view of data on all trades with one client across all products in his previous roles at Deutsche Bank and Solomon Brothers.
This week Mosaic Smart Data announced it had completed a $9m (€8m) investment round co-led by CommerzVentures and Octopus Ventures and which includes JP Morgan, an existing investor and client.
— Heiko Schwender (@hschwender) April 29, 2019
Hodgson said: “We are very proud to work with our investment partners and that J.P. Morgan has invested for a second time.”
MSX, Mosaic’s platform, can generate real-time analytics on any set of fixed income, currencies and commodities from both voice and electronic trading. The new funds will be used to expand into equities. Electronic trading developed in equities ahead of FICC and so traders already have access to large amounts of data for transaction cost analysis and to measure execution.
However Hodgson argued that as FICC has become more regulated, it has leapfrogged equities in what is possible for real-time analytics.
He added: “Firms want a cross-asset view across all their products in a single place, and for electronic and voice trading to be brought together.”
Through understanding past client behaviour, banks can improve service and profitability by anticipating their future needs. Hodgson said capital markets firms are spending lots of money on market data but cannot convert it into analytics and make it smart.
More and more data
Hodgson added: “Our key value proposition is then aggregation and normalisation of all types of data. Mosaic Smart Data can use machine learning to identify market outliers, provide richer colour and give humans the tools to augment their performance.”
Zihao Xu, Future of Money lead & early stage investor at Octopus Ventures, said in a statement: “One of the most exciting applications of artificial intelligence is combining it with human intelligence to create something which is more than the sum of its parts. Mosaic Smart Data’s machine learning models surface data insights that even the best human quant may not spot, delivering them to staff in a way which lets them act immediately.”
The team behind @MosaicSmartData know their industry inside out and we’re looking forward to seeing their AI and data driven platform revolutionise the way that FICC investment professionals trade. Exciting journey ahead! https://t.co/L1ZYLvqBBl #OVportfolio #futureofmoney
— Octopus Ventures (@OctopusVentures) April 29, 2019
At the start of this year consultancy Greenwich Associates said in its predicted trends for 2019 that the growing importance of data comes up in every market structure and technology conversation.
Greenwich said in a report: “From the $300m spent in 2018 on alternative data to pre-trade transparency to indexing to real-time market data, 2019 will see producers, distributors and consumers of data hyper-focus on gathering more of the right data, storing it in new ways, analyzing it via machine learning and AI, and acting upon it more systematically than ever before.”
The consultancy continued that the amount of data will only increase, and the industry has only scratched the surface in terms of how data can be applied to making money in the markets.
Warren Rabin, co-head of global macro sales and marketing at JP Morgan, said in a statement: “Today’s financial markets are awash in data at a scale never seen before, but what really drives performance is being able to extract truly actionable insights from that data in real-time. Tools like Mosaic that quickly make sense of vast data sets are changing the way our teams respond and operate and are going to become a differentiating factor for banks as they look to add value in their client discussions.”
Buy-side firms also need real-time analytics to examine their interaction with brokers and clients in order to improve service and profitability as margins are under pressure. Custodians, venues and exchanges could also generate reports from their data.
“We are in advanced dialogue with the biggest buy-side firms,” added Hodgson. “They are moving to providing liquidity but do not have execution analytics in real time. They need performance analytics at an atomic level to determine the quality of their execution and market impact.”
In 12 months’ time Hodgson said Mosaic would like to have established a standard for data analytics across capital markets.
“We will be in production across key tier 1 banks, some buy-side firms and we will have an international presence,” he added.
New beta-like ESG indices have performed better during the recent market turmoil.
Asset managers could spend $554m for ESG data by 2021.
Covid-19 has more staff working from home and needing to share real-time data.
ICMA and ISLA had asked for a delay of the SFTR reporting go-live date due to COVID-19.
The aim is to help the buyside identify addressable and non-addressable liquidity.