Massive amounts of data are now part of our lives, and certainly a key factor when it comes to investment management. Hal Varian, Google’s Chief Economist said it best:
“Between the dawn of civilization and 2003, we only created five exabytes; now we’re creating that amount every two days. By 2020, that figure is predicted to sit at 53 zettabytes (53 trillion gigabytes) – an increase of 50 times.”
An investment management business relies heavily on data – it’s what informs decision-making – so being able to visualise it clearly is essential. A data visualisation solution built for the future is a smart management investment. Technology is developing rapidly; in other words, it’s not enough to just rely on pie charts and graphs. The IQ Group’s 2019 study into digital engagement in the superannuation industry said:
“Pie charts were often plotted using the wrong visualisation for investments. Good visualisations are important to understand investment options and how performance affects superannuation.”
The more data a business has, the more complex analytics and visualisation becomes. Not only does it pose an increasing technology challenge, but it impacts significantly on investment management. Dealing with these huge amounts of data can lead to:
- Information overload, the sheer volume of data can make it challenging to gain meaningful insights
- Difficulty identifying relationships – data from diverse sources can be hard to ‘join together’
- Difficulties linking internal and external research is challenging
In other words, because there’s so much of it, it’s hard to ‘see’ and make sense of. Partly this is due to outdated technologies; typically, the investment management industry can be slow to embrace new and emerging technologies. Additionally, many of the solutions were large, enterprise-sized systems which made it difficult for smaller companies to leverage big data. But technology has advanced – particularly in the areas of cloud computing – it’s now possible to use cloud hosted solutions that are less expensive and yet still provide the same level of insight. And that’s enabled the areas of data visualisation and analytics to move forward, making it easier to harness big data and make it work for you, not hinder you.
Working with Refinitiv, AlphaCert is researching new technology for the development of new dynamic visualisation and data research capabilities. The objective is to leverage emerging technology to provide advanced analytics to existing AlphaCert data, so that:
- Data can be visualised in a form that enables new meaningful insights
- Gain data insights that are not possible through traditional data visualisation tools (pie charts, bar graphs etc.)
As part of Refinitiv’s Early Adopter Program, AlphaCert’s commitment is to take the data provided by Refinitiv and, using data visualisation and analytics, provide ‘use cases’ that enable greater insight and value. Granular data and relationships can be dynamically visualised in the following areas:
- Environment, Social and Governance (ESG) – the depth and breadth of ESG data is exponentially increasing and this information is now a key criterion in investment decision-making and reporting.
- Relationships between data – we live in a highly connected world. Graph databases natively store these connections and allow simple and fast retrieval of complex data structures and data relationships.
- News and analytics – explore massive amounts of news and analytic data sources to look for keywords, providing analysis across sentiment, relevance, novelty and volume to link with investments data.
Using data visualisation and analytics, we can combine these different data types and provide analysis around where they might impact on a fund. For example, when it comes to News then something like Brexit is big and obvious. But there are other, smaller events happening around the globe that can have a disproportionate effect on a portfolio, such as the arrest of an employee in a particular company located in a country that has a record of human rights abuse. It can take a while for that information to filter down and then impact on a fund, so it’s necessary to go deeper into the data to identify these events.
Data visualisation and analytics are essential for investment managers, because it’s how they make sense of the massive amounts, and different kinds of, data that’s available. It can then be harnessed to enable better decision-making around funds – and greater control.
If you’d like to learn more about the research we’re doing with Refinitiv, and how data visualisation and analytics can enhance the management of your portfolios, schedule a demo and we’ll get you started.