Opening Cross: Mo’ Data, Mo’ Problems

Big Data: Everyone’s talking about it, but what is it, and more importantly, can it make money? Basically computation of such large, numerous and sophisticated datasets that the process requires new paradigms of storage and analysis, Big Data presents big challenges to be able to address it correctly, but creates big opportunities for those who can do so.
In the past, a firm’s value was in the experience of traders, and their ability to assimilate information and spot, recognize and react to events. This task became onerous as data volumes increased, prompting firms to translate that experience into algorithms with greater capacity, which can react faster and more often.
But even the best algorithms risk being overwhelmed by the amount of data out there—especially as firms seek to incorporate new inputs, unstructured data, information on supply and demand, among numerous other content types.
For example, this week, we report on how StarCompliance—a provider of software that monitors the personal trading activity of employees of financial firms to ensure they are complying with the firm’s code of ethics—is using content from news aggregator Acquire Media to reconcile trading activity against news activity to spot potential insider trading by individuals or the firm, using a weighted trailing average news impact score calculated by Acquire on pre-filtered content, so as not to overwhelm compliance officers.
Of course, there are some projects so mind-bogglingly complex that they make this important service look like child’s play. And key to making these understandable (i.e. valuable) at the consumer level—whether that consumer is a human monitoring compliance or an algorithm poised to fire off trades—is reducing complexity early in the process. For example, in this week’s Open Platform, Jeff Wootton of SAP recommends using event stream processing technology to perform “smart capture”—which performs some analytical processes within the data stream itself to reduce the amount of work that must be performed to gain valuable insight once the data reaches its destination.
In a real-time environment, this could be used to create new derived inputs to support trading, but risk is an obvious sweet spot for the application of Big Data. With so many initiatives underway, the best way for firms to address these and ensure compliance is to capture as much data as possible to cover all their bases.
As Waters reporter Steve Dew-Jones reported from last week’s Big Data Online Summit, hosted by WatersTechnology, the “holy grail” of Big Data is “continuous risk analysis,” said independent information architect Tom Dalglish. “Pre-trade risk analysis is where regulation is driving us. If that’s taking 30 minutes, it’s too long; we need it to be in seconds,” Dalglish said.
And Big Data is key to achieving this across datasets as diverse as market data analytics, intraday risk assessment, and real-time data on liquidity and funding, but breaking down traditional business silos to leverage the skills and knowledge trapped in those silos across the enterprise, reported Tim Bourgaize Murray, citing remarks at the Summit by SAP’s Stuart Grant.
But before this can begin, firms must address the people problem of Big Data: finding the right engineers to build a Big Data architecture that will deliver the desired results, and to develop the analytics that will reap those results, reported Anthony Malakian from the summit, citing Howard Halberstein, lead solutions architect for Unix at Deutsche Bank, who said assembling and storing the data is less problematic than knowing how to use it. “When you have that many variables… to correlate… where do you start?” Halberstein said. “I’ve seen things get mired when they get to the analytics piece [because] they can’t get any usable information from this large pool of data.”
In short, while Big Data will be a requirement going forward, the most advantage will be gained by those who can overcome these challenges and be first to use it to their advantage across their lines of business.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Data Management
Stocks are sinking again. Are traders better prepared this time?
The IMD Wrap: The economic indicators aren’t good. But almost two decades after the credit crunch and financial crisis, the data and tools that will allow us to spot potential catastrophes are more accurate and widely available.
In data expansion plans, TMX Datalinx eyes AI for private data
After buying Wall Street Horizon in 2022, the Canadian exchange group’s data arm is looking to apply a similar playbook to other niche data areas, starting with private assets.
Saugata Saha pilots S&P’s way through data interoperability, AI
Saha, who was named president of S&P Global Market Intelligence last year, details how the company is looking at enterprise data and the success of its early investments in AI.
Data partnerships, outsourced trading, developer wins, Studio Ghibli, and more
The Waters Cooler: CME and Google Cloud reach second base, Visible Alpha settles in at S&P, and another overnight trading venue is approved in this week’s news round-up.
A new data analytics studio born from a large asset manager hits the market
Amundi Asset Management’s tech arm is commercializing a tool that has 500 users at the buy-side firm.
One year on, S&P makes Visible Alpha more visible
The data giant says its acquisition of Visible Alpha last May is enabling it to bring the smaller vendor’s data to a range of new audiences.
Accelerated clearing and settlement, private markets, the future of LSEG’s AIM market, and more
The Waters Cooler: Fitch touts AWS AI for developer productivity, Nasdaq expands tech deal with South American exchanges, National Australia Bank enlists TransFicc, and more in this week’s news roundup.
‘Barcodes’ for market data and how they’ll revolutionize contract compliance
The IMD Wrap: Several recent initiatives could ease arduous data audit and reporting processes. But they need buy-in from all parties if all parties are to benefit.