State Street announced the launch of State Street VerusSM, a mobile-first application that makes connections between news coverage and investors’ holdings through the application of big data, machine learning, natural language processing and human intelligence. It’s designed to help investment professionals in the front office gain greater insights, mitigate risk, and generate alpha.
“About 150,000 articles are generated on business and finance topics each week, and investment and risk professionals struggle to reliably filter out noise and feel confident that they are not missing anything that could impact their portfolio,” said Stephen Marshall, head of State Street Verus in a statement. “Our new solution highlights not only the direct connections but also the less obvious indirect connections between these news items and clients’ portfolios; shortening the amount of time between when a relevant news story breaks and when a client can comfortably answer the question, ‘What is my exposure?’”
Verus gathers coverage from thousands of major global, English-language news publications and combines machine learning algorithms with portfolio data from State Street’s risk analytics platform to curate users’ newsfeeds. It also incorporates the insights of a dedicated editorial team comprising former financial news editors and journalists continuously providing feedback to the algorithms so that the connections made are relevant and that the underlying algorithms are continually improving.
Once direct connections are identified, Verus analyzes third-party relationship data in order to surface relevant indirect relationships within the portfolio. Connections are then ranked by a “V Score” based on three main factors:
- Article content: Verus algorithms detect whether the language in an article has historically shown a strong likelihood of being a high priority news item.
- Risk: Verus looks at both portfolio and relevant security level analytics calculated by the risk analytics platform — and how they have changed over time.
- Network connections: Using third-party relationship data, Verus determines the extent to which relevant holdings within the portfolio have weak or strong common relationships across their respective supply chains — which can be an important indication of systemic risk.
By combining the relevance of a news story with the portfolio and security-specific analytics of connected assets, as well as the interconnectedness of those assets, the V Score provides a multifaceted answer to the questions ‘Should I care?’ and ‘How much should I care?’ to help inform future decision making.