Opening Cross: ‘Where We’re Going, We Don’t Need Roads’

The film nailed some things about the future: mobile payments, biometrics and video conferencing—yet inexplicably thought we’d have a fax machine in every room—and was on track to correctly call the Cubs World Series winners before the team’s elimination last week. However, it was overly optimistic about flying cars, pizza hydrators, and inflation. So take note: Just because some of your predictions pan out, don’t assume they all will.

SunGard’s MarketMap data display division has a vision of the future: one free of old-school desktop terminals tethered to desks, where data is just as mobile as the people consuming it, and where the order of the day will be breaking down those terminals into portable, widget-like components that can be integrated with other applications. SunGard isn’t the only vendor with this vision—web services data providers are already working on this assumption. The largest terminal providers, Bloomberg and Thomson Reuters, no doubt have a different vision.

A key dataset to understanding any future is analytics, ranging from charts that allow traders to spot and extrapolate patterns, to sophisticated predictive analytics that crunch enormous volumes of historical data and utilize Big Data analytics to harness and correlate masses of structured and unstructured data.

Recognizing the value of analytics, commodities and energy data provider Platts is combining its analytical assets and acquisitions into a new division, Platts Analytics, in response to the growing importance of and interrelation between commodities markets.

Meanwhile, quantitative strategy-building technology provider Deltix has begun incorporating Wall Street Horizon’s earnings data information into its platform, to help traders predict and take advantage of volatility signals resulting from a change in a company’s earnings date. Deltix president Stuart Farr says that once the vendor finishes researching WSH’s dataset, he expects to find tradable signals that make the integration beneficial to clients.

Many data executives’ vision of the future is never-ending fee increases, such as those currently being proposed by ratings agency Fitch, which is creating more granular licenses based around clients use its data. Some consumers believe this is merely designed to increase its revenues at the expense of subscribers—and certainly some of the increases described to IMD by end users sound extreme. But by consulting clients well ahead of intruding the fees next year, one would hope the vendor will work with clients to find a solution that’s reasonable for everyone—if for no other reason than just as regulation created opportunities for new vendors to enter businesses like ratings, a company’s decision to raise fees could (assuming competitive alternatives are available) provide a business case for firms to consider smaller alternatives. 

And unlike in the movies, you can’t just go back in time and fix bad decisions later, which is why it’s important to be confident in your decisions and the analytics that support them. Imagine what would have happened if Back to the Future had proceeded with actor Eric Soltz—best-known as Cher’s son in Mask—in the title role instead of Michael J Fox. Would the movie have been popular enough to spawn two sequels? Would Fox’s career have stagnated in Teen Wolf sequels and more series of Family Ties? 

In the end, the only way to guarantee your predictions about the future is—like elderly Biff Tannen, who hijacks the DeLorean to give his younger self an almanac so he can make millions betting on sporting events—to see it for yourself. And since that’s still impossible, what the financial markets are doing with predictive analytics within the realm of possibility—while not perfect—is a good start.