Mosaic: data needs to go from big chaos to smart profit in FICC

Disorganized data adds no value to a FICC business, indeed – as in the case of regulatory data compliance or client relationship development – it may even have an actively deleterious effect.

Making data smart completely transforms this situation: fast and productive multi-dimensional analysis becomes possible across multiple time frames while incorporating multiple data and analytical sources. Both human and machine decision making is thereby enhanced.

This capability would be beneficial for FICC businesses at any time, but in an environment as demanding as the current one, it is almost a necessity. Client relationships, market share, regulatory compliance and operational efficiency will all benefit as a result, writes Matthew Hodgson, CEO and founder of Mosaic Smart Data, a J.P. Morgan-backed fixed income data fintech.

What makes data smart?

So, in the context of FICC, what makes data smart? At its simplest, for data to become smart it needs to be converted to a state whereby it can be easily used as the basis for optimal decision making in multiple domains. That requires uniformity and granularity, so that it can be readily manipulated as needed for each query situation.

The first step is to normalize and aggregate all existing internal (and if desired also external) data sources across all channels into a single consistent and consolidated state, which can also be updated in real time. Then supplement this with analytics that give the cleaned data the business intelligence to make it smart.

Armed with smart data, analysis and reporting can also become smart over any time scale from seconds to years. A critical gain here is that analysis and reporting become dynamic, actionable and potentially profitable – not just pretty pictures to be printed off and discarded later.

This is especially true if the smart data solution used is sufficiently flexible to allow the incorporation of proprietary analytics alongside its own built-in analytics, as this delivers multiple additional benefits:

In-house quants will have immediate access to a single homogenous granular data store, which will significantly boost their productivity, as they will no longer have to spend ~80% of their time on collecting, cleaning and organizing data.
Combining proprietary and built-in analytics will enable FICC businesses to make the very best possible use of their data to derive more profitable business intelligence.

Users will have instant desktop access to precisely the quantitative expertise they need to maximize their individual productivity. All this can be delivered in real time; the value of analysis will no longer be eroded by latency.

Better buy-side relationships

Servicing buy-side relationships profitably and efficiently in an environment where data is proliferating and margins are tight requires best in class data curation and analytics. Recent analysis by Boston Consulting Group found that this was typically not the case so that: “…data fragmentation and siloed management practices leave sales teams with a limited view of the client.” Furthermore: “In the absence of high-quality, easily accessible data, sales teams are required to spend valuable time searching for risk, industry, benchmarking, and other information they need.”

By contrast, smart data enables far more efficient navigation to deliver quick identification of the most promising opportunities to enlarge client relationships and profitability. Building a detailed profile of a client’s current activity becomes a matter of seconds, making identification of possible additional synergies and sales almost trivial.

One example of how this enhanced client knowledge can be used to gain an important edge is in the automated generation of customized and targeted insights. If all a client’s data is immediately available in a readily-accessible format, it becomes possible to assemble intelligent narrative that will be of interest and value to that specific client.

However, if the solution that smartens the data also includes tools to create content without requiring human intervention – such as through the use of natural language generation (NLG) tools – then the entire process becomes not only highly automated but also exceptionally valuable in boosting client relationships and profitability. When compared with distributing generic research or manually writing custom material, a massive increase in productivity becomes possible.

A few leading FICC businesses are already taking this approach in order to enhance the client experience and to boost client retention and revenue. Other examples include providing clients with customized tools that assist them in searching for corporate bonds across multiple sources. An important value-add here is that clients’ smart data profiles can be leveraged to customize search tools to their specific needs. Therefore, the default search sources provided will only be those relevant to individual clients, thereby making their workflows more productive.

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